The Beneficiary Blues

The function of funerals is to provide peace and comfort. For our diverse cultures, a proper burial to ensure an uninterrupted journey to the world of the ancestors is paramount. Many days of rituals are observed, with variations amongst the amaXhosa, BaSotho, emaSwati, the isiZulu, the Ndebele, Pedi, TshiVenda, Tswana and XiTsonga.

The function of funeral insurance is to ensure that there is money available to pay for some of the costs of providing that peace. Money that is not tied up in a deceased estate or earmarked for other important costs. Money that needs to be paid out to your nominated beneficiary to carry out your last wishes for your burial.

Our diverse range of cultures and their individual funeral practices can add further layers for consideration when choosing your funeral plan. If preparations need to be made in the family home, or if family needs to travel from another province, there needs to be money for transport and the traditional vestments like burial blankets and supplies for the feasts and ‘After Tears’. Provided your premiums are up to date, the manner of passing is not subject to any exclusions outlined within the policy, and all the required documentation has been submitted correctly, your beneficiary can receive a pay-out in 24 hours.

That quick pay out goes a long way to ensuring that the multiple events in the timeline of a burial can begin without delay. These practices are steeped in hundreds of years of traditional heritage, so there is huge pressure to ensure that proper burials are carried out. For the spiritual wellbeing of the deceased, as well as the living. This can translate into further pressure on the policy holder to cover multiple generations for certain eventualities, which can be tricky within the rules of a funeral policy.

As far as the policy is concerned, these multiple generations are your spouse and no more than five children who are under the age of 18. They are termed “dependents”. For your parents and parents in law (maximum of four parents) up to the age of 74, you can pay an additional amount per person, and they will be covered under the same policy through the additional cover benefit.

The complexity comes in where the traditional understanding of family can differ from what is covered under the policy. Only parents and parents in law can be added as dependents, not grandparents or extended family. In traditional family situations, it would be recommended that multiple policies be taken out by separate policy holders, after discussions with the family about who will be added to which policy to avoid duplications. Aunts and uncles can take out their own policies and add their parents, as long as their parents are under 74. When the time comes to laying a dependent to rest, the policyholder will be paid out as the beneficiary, to carry out their last wishes.

When it comes to spouses, the policy holder needs to make some important decisions. There may only be one spouse insured on a policy, and it is only their parents that can be added as dependent in laws. They must be a partner in marriage, legally recognised union or customary marriage concluded in accordance with the applicable indigenous law, religion or tradition, which may be subject to registration at the Department of Home Affairs. Certified written proof of marriage or an affidavit will be required.

In the case of multiple spouses, only one spouse can be registered as a dependent. In accordance with customary rites, the first wife is usually deemed the beneficiary for any policies as she assumes the right of heading the family. However, the policy holder may nominate anyone as a beneficiary. If there is no nominated beneficiary, the funds will be paid to the deceased estate, which can take months to access. There is no automatic payment to your next of kin, and there is no automatic assumption that any of the wives or children would be that next of kin, either. This is why nominating your beneficiary is crucial.

If you have not nominated your beneficiary yet, or if you would like to add your parents as dependents, you can update your policy over the phone, or notify a customer care agent in writing. This way, you ensure that your policy is working for you and your family, to help you uphold the traditions that matter to you.

With Legal&Tax you’re not alone

• Email
• WhatsApp - Just type 'Hi' to start chatting
• Telephone