Funeral cover for kids

Although the possibility of losing a child is the last thing any parent would want to consider, it is essential to have funeral cover in place should an unforeseen event occur.

Nthabiseng Sethabela-Makoeng, Product Manager at FNB Life says like any form of funeral insurance, this type of cover is taken out to ensure that parents or guardians can cater for expenses associated with arranging a funeral in the unfortunate event that a child passes away.

She addresses key questions that consumers often have about funeral cover for children:

  • Can you insure any child – any biological, legally adopted, foster, step children and grandchildren or close relatives can be covered in a policy.
  • Are the rules the same – according to the insurance act, the rules for children covered under funeral insurance slightly differs compared to other Insurance policies. In terms of the cover amount, children between the ages of 0 to six years old can only be covered for a maximum of R20 000. For children between the ages of six to seventeen years, the maximum cover amount is limited to R50 000. From the ages of 18 and older, there are no legal restrictions to the cover amount.
  • How many children can be covered in one policy – while the isn’t a specific regulation on the maximum number of children that can be insured, the limit differs from insurer to insurer. For example, FNB Life allows customers to cover up to eight children, with up to five children covered for free on the Family Bundle.
  • Is there a waiting period for children – there’s no waiting period for accidental death. For natural death the standard waiting period is six months. However, this can vary depending on the insurer’s terms and conditions.
  • Does the cover end when the child grows up – most Insurers end children’s cover at the age of 18 and others at the age of 25, i.e. cover falls away. The parents will then be required to add the child as an extended family member and will be charged standard rates. However, with FNB the child’s cover does not fall away. The child can remain covered at the same rate as long as the plan remains active.

“When taking out funeral cover for children, it is essential to thoroughly go through the terms and conditions of your policy to fully understand what you are covered for,” concludes Sethabela-Makoeng.

Insure your household employees against a funeral

Many people who employ household employees often do not take out funeral cover for their employees as they perceive it to be a costly and complicated administrative burden.

“However, due to product innovation and simplicity, funeral insurance has become affordable and easily accessible for small business owners or individuals who hire one or more permanent employees,” says Nthabiseng Sethabela-Makoeng, Product Manager at FNB Life.

“Unlike traditional workplace benefits, which may require you to consult an expert, taking out funeral cover for your household employee is as simple as providing the insurer with the employee’s personal details, choosing a suitable plan, cover amount and paying a monthly premium,” says Sethabela-Makoeng.

Workplace benefits are traditionally known to create trust, commitment and influence a better working relationship between an employer and employee. They play an important role in making employees realise that the employer values them and has their best interest at heart.

Sethabela-Makoeng, says although taking out funeral cover for your household employee is not a legal requirement, it plays a critical role when considering the fact that funerals are expensive and employees may not have adequate cover, resulting in their families looking up to you for financial support, should a tragedy occur.

In most cases employers who do not have cover in place often have to tap into savings or use credit to contribute towards the funeral as an act of goodwill.

Any employee who is a South African citizen or permanent resident in possession of a green bar-coded RSA ID book or Smart ID Card can get funeral cover as a benefit from their employer.

For example, FNB Life offers Employer’s Funeral Plan, ranging from R20 000 for a low premium of R49 and up to R60 000 for R125, with varying discounts the higher the number of employees covered.

Should the insured person pass away as a result of an accident, their loved ones will receive double the cover amount, e.g. an employee covered for R50 000 would receive R100 000. This benefit would be available immediately from the take up date and no waiting periods apply.

However, for natural death, normal funeral cover waiting periods will apply. Claims will not be paid out for natural death within three months and for suicide within 24 months.

“When taking out funeral cover for your household employees there is no need for any medical examination or underwriting. In the event of death of the insured person, the plan will pay out the specified cash benefit you selected,” concludes Sethabela-Makoeng.

5 trends shaping the insurance industry

As the insurance industry continues to evolve while facing new challenges, catastrophes, technological disruptions as well as uncertain, volatile and complex economic conditions, insurers and brokers have no choice but to adapt to constant change in order to thrive.

According to Malesela Maupa, Head of Insurer Relationships at FNB Insurance Brokers, there are five key trends that are likely to shape the South African insurance industry this year:

Regulation – regulatory changes will be at the top of the agenda for insurers as they ensure that their businesses comply with key amendments impacting the entire financial services industry, namely:

  • Retail Distribution Review (RDR) – revolutionises how financial services companies offer advice and distribute products to customers.
    Twin Peaks – introduces a new prudential regulator located in the South African Reserve Bank (SARB) to ensure that consumers are offered more protection and make the financial services system more resilient.
  • Policyholders Protection Rules (PPRs) amendments – aim to improve market conditions in the insurance industry and further ensure that consumers get access to adequate products.
  • Protection of Personal Information Act (POPI) – regulates how customer data is managed.
  • Treating Customers Fairly (TCF) – ensures that all financial institutions adhere to the required customer treatment standards.

Climate Change – the increase in the frequency and severity of extreme weather conditions, coupled with intensifying natural catastrophes will continue to have a significant impact on clients and ultimately on the bottom line of insurers.

“Natural catastrophes, business interruption and cyber incidents are the top three risks that clients should protect their businesses against to avoid incurring severe financial losses,” says Maupa.

Stringent underwriting measures – due to the ongoing strain endured by global reinsurance and insurance markets as a result of increasing catastrophic losses and insurance costs, we are likely to see more stringent underwriting and proactive risk management measures being taken.

Products innovation – insurers will continue working around the clock to develop innovative products that meet the ever changing needs of customers.

“For example, as South Africa increasingly becomes a litigious country, more liability based products like Social Media Liability cover are being introduced in the market,” says Maupa .

Technology – traditional insurers will be required to put in more effort to catch up with start-up disrupters who are progressively using technology and data analytics tools for policy management and administration, amongst other innovations that challenge the traditional insurance model.

“Given the unprecedented challenges and changes that continue to shape the global insurance industry, it is essential for insurers and brokers in South Africa to always remain prepared, be a step ahead and flexible enough to navigate uncharted territories,” concludes Maupa.

What to consider when choosing an Executor in your Will

Most people understand the importance of having a valid and up to date Will in place but few carefully consider who to nominate as an executor in their Wills. Your executor is not only tasked with the responsibility of ensuring that your wishes are carried out but also that all legal formalities pertaining to the estate administration process are adhered to.

“The estate administration process can be extremely complex and time consuming, combined with the trauma involved in losing a loved one. It is important to consider nominating an objective and competent professional as the executor in your Will. Trust is important and using a professional executor with the requisite experience can minimise the stress associated with settling your estate,” says Vijay Morarjee, CEO FNB Fiduciary.

When nominating an executor, we suggest you consider the following:


Relying on one specific individual may cause a delay in wrapping up your estate, they could possibly pre-decease you, retire or for any other unforeseen circumstances be unable to perform the duties that you entrusted them with. Consider nominating an executor, which doesn’t rely on one specific individual but which has sufficient skilled staff to perform this function.


Keep in mind that your loved ones or beneficiaries might live in different towns and cities across the country or even abroad. It therefore makes sense to choose an executor that has sufficient regional and national representation which will aid interaction between beneficiaries and executor.

Skill set and experience

The most important consideration is that your nominated executor should have the skill and experience required to adequately perform this highly complex task. Nominate a specialist estate administrator with the necessary legal and tax knowledge. Many people nominate an executor solely based on the discount offered on executor fees without much consideration for the competencies and skills available.

Trust is key

Ultimately it all comes down to trust. Do you trust your nominated executor enough to step into your shoes and protect what is important to you, whilst having the necessary understanding of the estate administration process?

“Access an experienced and knowledgeable executor to guide you through the complex and time -consuming deceased estate administration process as well as help with the numerous practical tasks which need to be performed. It is a very difficult time for families and our team of specialists at FNB Fiduciary can assist with the administration of the most complex estates,” concludes Morarjee.

Questions to ask before cancelling funeral cover

Consumers who are struggling to make ends-meet should avoid making the rash decision of cancelling their funeral policies without first weighing the consequences.

Lee Bromfield, CEO of FNB Life, says given the high cost of living and uncertain economic environment, being caught off guard by a funeral, which may cost R30 000 on average, can place you in a far worse financial position.

He urges consumers to ask themselves these important questions before cancelling their policies:

  1. Are you really saving? – keeping up with premium payments is unlikely to break your budget. Funeral cover is currently one of the most affordable forms of insurance available to consumers in South Africa. For instance, an adult aged between 18 and 64 can pay as little as R35-00 a month for R10 000 cover.
  2. What are the consequences? – when your policy lapses, you will lose out on all the premium payments you had made. Furthermore, you and your beneficiaries would have to complete a six months’ waiting period for natural death, if you were to take up a new policy.
  3. Have you re-evaluated your budget? – don’t opt to cancel financial commitments that you consider grudge purchases, but rather make an informed decision based on a thorough evaluation of your financial position.
    Consider drawing up a comprehensive budget and separate needs from wants, to establish what you can really do without. This will help you save by cutting back on luxuries and ensure that you have enough money reserved for your needs. “If you are unable to resolve the situation by yourself, consider seeking expert advice,” says Bromfield.
  4. Do you have a plan B? – many consumers who have cancelled their policies and do not have an alternative often turn to unscrupulous lenders, such as mashonisa’s, who can charge up to 50% interest or more on a loan.

“If you find yourself having to make tough decisions due to financial difficulties, always weigh the consequences and alternatives available before taking drastic measures that can expose you to even higher financial risks,” concludes Bromfield.

A beginner’s guide to sectional title insurance

Sectional title insurance can be a little confusing and, as a new owner, you may be tempted to just assume your body corporate has you covered. While this may be the case, understanding the extent of your coverage and your personal liability is the only guaranteed way to protect yourself against potentially costly oversights.

While you don’t have to be an insurance expert, Bill Rawson, Chairman of the Rawson Property Group, suggests paying close attention to these five need-to-know factors.
Who pays for sectional title insurance?

“Sectional title insurance is a legal requirement for all developments,” says Rawson, “which makes it a non-negotiable expense. The costs are typically shared by all section owners and are factored into the monthly levies. They are then paid out of these pooled funds by the Body Corporate.”

While the cost of this insurance is shared, it’s not necessarily shared equally, and contributions are typically based on a unit’s participation quota.

“Exceptions to this rule can be made if a particular unit’s replacement value has increased, and the owner – or their bank – wants to ensure they are adequately covered,” says Rawson. “The additional cost would then be paid by that unit’s owner above and beyond their normal participation quota.”
What does sectional title insurance cover?

“At the very least, your sectional title insurance should cover all residential sections and common property for their full replacement value in the event of damage or destruction from things like fire, flooding, earthquakes, burst pipes and rioting,” says Rawson.

“Your Body Corporate can choose to extend that basic coverage to include things like third-party liability, or the cost of alternate accommodation if a section becomes uninhabitable due to an insured event. This can be good idea, but does need to be carefully considered and agreed upon by all parties.”

Rawson advises all section owners request a copy of the Body Corporate’s insurance policy to make sure they feel comfortable with the cover provided.

“If you’re not convinced your development’s coverage is adequate, bring it to the attention of the Body Corporate right away.”
How to cover the rest

“It’s extremely important to note that sectional title insurance only covers the ‘brick and mortar’ part of residential sections and common property,” says Rawson. “It excludes any moveable contents like furniture and décor pieces, which must be insured by section owners or their tenants in their private capacity.”

The most accurate way to adequately insure your home contents is to compile an inventory and estimate the replacement costs for each item.

“This can be time-consuming to do the first time around,” says Rawson, “but is reasonably easy to update on an annual basis, and is the safest way to avoid disputes with your personal insurer if you have to make a claim.”
Keeping your coverage current

As with any other type of insurance, sectional title policies need to be reassessed and updated annually. Section owners are advised to check that this happens at their Body Corporate’s AGM.

“Most specialist sectional title insurers offer complementary valuations for new policies,” says Rawson, “but these should be revisited by the Body Corporate before every AGM. This provides an opportunity to adjust coverage for things like inflation, rising building costs and improvements to common property or individual units. It’s not a bad idea to get another professional valuation done every few years as well, just to make sure you haven’t strayed too far from realistic replacement values.”
Understanding your excesses

Even the best insurance will have excesses that need to be paid by somebody. The standard rule (defined in the Prescribed Management Rule 29 (4) in the Sectional Titles Act) is that the section owner who is claiming from insurance must pay the excess. This can, however, cause disagreements in some situations.

“There are cases where damage to one unit is caused by another unit,” says Rawson, “for example, if a tap is accidentally left on and water floods into the unit below. It would seem very unfair to expect the owner of the flooded unit to pay the insurance excess, which is why some Body Corporates pass special resolutions to cater to these types of situations.”

There are also insurance products on offer that can negate these problems, so Rawson advises having a good look at your policy to see what rules apply to you.
“The main thing to remember is the better informed you are, the more likely you are to be able to spot a potential problem, and the smoother things will go if you do have to file a claim,” says Rawson. “If you have any doubts or queries, ask an insurance expert to look over your sectional title policy, or request an explanation from a knowledgeable body corporate trustee.”

A way to safeguard the future of your family

People hold many different views about having a last will and testament. The reasons not to have a will usually range from being single, to not having any assets, and nobody to leave money to. The reality is, however, that dying intestate (without a will) could result in complications, says Standard Trust Limited, the wholly owned subsidiary of the Standard Bank Group Limited with over 130 years of experience in fiduciary services.

In essence, dying without a will means that whatever assets you may have accumulated may be inherited by individuals that you have not nominated. There is no clarity regarding who should get what. You are therefore leaving others to make decisions for you, as relate to your final wishes and even who your executor should be, says Kobus van Schalkwyk, Head of Corporate Development for Standard Trust Limited at Standard Bank Wealth.

“Dying without a will means that the Master of the High Court has the final say on the appointment of an executor to take control of the assets. This also means that people you may have wanted to benefit do not, and those you may not have wanted to benefit do.’ A will is therefore a tool to direct how and when assets are passed on to beneficiaries.

Some of the advantages of having a will in place include:

  • You can arrange just when children can be given control of assets. Usually, a testamentary Trust is created and managed by a professional to carry out these orders. It is important to give careful consideration as to the identity of the trustee responsible for administering the Trust.
  • You can lay down any conditions you choose for the distribution of your assets – as long as all the actions are legal.
  • A will can be drawn up at any time to cater for specific circumstances in your life. As your marital status or financial position changes, so should your will.
  • You can give directions of how liabilities are to be settled. For instance, it is common practice to order that the costs of a funeral be paid by the estate.
  • “The reality is that whatever your financial status, you will leave something behind. The need for a will becomes more pressing when you have assets and a family. A will should, if you have minor children, be used to nominate guardians for them. Failing to do so could mean that your children are brought up by a person you would have preferred not to care for them, as this vital decision also becomes a function of the master of the high court,” says Mr van Schalkwyk. Appointing guardians and leaving money in a Trust for benefit of your children ensures that the guardians have access to funds for their development and education.”

It is common to find templates of wills on the Internet and even in local stationery shops. However, even though everyone has a right to draw up their own will, you should consider the following potential consequences:

  • You could write instructions that are unclear and therefore cannot be carried out.
  • You could forget to insert vital clauses, such as revoking an earlier will.
  • You could omit to include vital information because you don’t have the benefit of an attorney, certified financial planner or fiduciary specialist trained in drawing up and administering asking questions and clarifying issues.
  • You could make the mistake of thinking that a software package or Internet document asks all the same questions of you that a professional would ask.
  • You could not have the correct number of witnesses or it could be incorrectly signed.
  • You may not have the expertise required to correctly set up Trusts and other mechanisms you may require.
  • “The best time to have a will drawn up is right now,” says Mr van Schalkwyk. “Taking time to meet with a professional and discuss your requirements will also mean that you understand exactly what taxes are triggered by death duties are, how they are administered and when they become payable.”

Your adviser should also be able to discuss capital gains tax (CGT) which is levied on an estate and indicate what the implications of this would be on the value of your estate. The higher the value of your estate, the more it becomes necessary for an adviser to assist with helping you plan how tax and CGT costs can be met without impacting negatively on the value of your estate. “

“The implications of pension fund pay outs and cash payable from life insurance policies should also form part of any consultation. Professional advice is useful in ensuring that the cost of taxes does not unnecessarily reduce the value of the estate to the detriment of your heirs. ”

“A professionally structured will, combined with proper personal financial and estate planning advice, are two tools that can help safeguard your assets and provide a legacy and an easier future for your family, ends Mr van Schalkwyk.

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About 10% of the South African population has wills

A good financial plan can guide you to financial independence and protect you and your family against an uncertain future. Such a financial plan encompasses all aspects of your financial wellbeing, including the drafting of your will, which will basically be the culmination of a lifetime of careful and strategic financial planning.

“Such a financial plan will ensure your financial independence and that your family will be supported, irrespective of what the future holds. I regard the will as one of the most important documents of the financial planning process,” says Gustav Neethling, director of The Financial Emporium.

“When formulating a financial plan for a client, we will discuss issues like whether that particular client has sufficient financial provisions in place – provisions that will enable the client to reach his or her financial goals. The next thing we will look at will be to draft or update the client’s will to ensure that the client’s family and dependants are properly being taken care of,” explains Neethling.

“Well-known financial guru, Suze Orman, once said, ‘A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life’. This is where financial planning, including will, comes in. A reputable financial planner is trained to look at each client individually and to then give advice that will improve the person’s financial wellbeing and to advise on the best options once this person dies – like what happens to your investments? One needs to look at these aspects, especially if there are dependants involved,” stresses Neethling.

A financial services professional will also be able to advise you on more complicated will issues, like if you have foreign assets, complicated divorce agreements, elaborate businesses, and more, with the help of either his in-house lawyer or a lawyer that he has contracted. “But the benefit of using a financial services professional is the fact that they have insight into your financial history and long-term planning,” adds Neethling, “as neither of the two can be viewed in isolation”.

“It is a well-known fact that only about 10% of the South African population has wills and one of the reasons is that people believe that ‘you don’t know what you don’t know’. This is not a way to handle your finances or your future. It does not matter how bad the situation is, you will have to confront the facts, do careful planning, regroup, execute and then make provision for what should happen one day when you are no longer here.

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Man, get your stuff together

Nowadays, single parent families have become increasingly common due to a number of factors. High divorce rates, the passing of a spouse or even single parent adoptions are just some of them. Despite statistics indicating that most households in South Africa are run by single mothers, the ‘case of the single father’ does in fact, exist.

As a parent, there is no denying that you want the best for your children, and in most cases to give them access to things and experiences that you didn’t have while growing up. However, as a single father, you might find that some of these goals can be extremely challenging, given that you are a single income earner.

With this in mind here are some important financial considerations to make as a single dad:

Knowledge is Power

You may have heard the phrase ‘knowledge is power’ and when it comes to managing your finances, no truer words have been spoken. As you look for ways around your finances as a single parent, to avoid feeling the financial pinch, a great starting point is educating yourself around your finances. In doing so, you will have a better understanding of how to navigate around your current financial situation and quickly learn how to make your money work for you, which is crucial given that you may have limited means.

Take small steps now for the future

All throughout history, some of the wisest of men have highlighted the importance of taking small steps towards achieving a greater end goal. This is also relevant when it comes to parenting. As a parent, your children’s long term future is probably already playing back and forth in your mind. You may even have long term goals for them already, be it to see them attend medical school one day or even getting them their first car straight after high school. The reality is however, that these dreams come at a cost. Choose to take those all-important ‘small steps’ financially now, such as saving and budgeting to make provision for your children’s big moments in the future.

Where there’s a Will there’s a way

No, really – having a Will in place will have a positive impact on your children’s future, even in your absence. This is even more important as a single parent as your children rely solely on you for their upbringing. So, put a plan in motion to secure their financial future and educate yourself around the importance of having a Will in place.

By choosing to not have a Will in place, you are denying your children one of the greatest gifts that you can give them when you are not around anymore. In addition to this, you will also risk leaving the decision on how your assets are divided up, to the courts, which will not guarantee that your assets will be spilt as you wished.

Man, get your stuff together

One of the greatest gifts as a parent is that you get to witness first-hand, how your children grow as they enter the different stages of life, which brings about different milestones and experiences. If anything, these experiences should make you consider financial products that will make provision for these moments. In light of this, it is important that you invest in long term insurance products that play a vital role in managing your children’s financial situation, and will also help you protect your family in the event of unforeseen circumstances such as; illness, injury, disability and an unexpected passing. It’s advisable however, not to look at these products in isolation, but that you take up a combination of these products to ensure that your children have adequate financial protection – no matter what the circumstances.

With that said, there is no set formula to raising children – especially when being a single dad – some days are a breeze and the next not so much. However, one thing is constant – you want the very best in life for your children. So, take steps today to move your financial planning to the next level and provide for life’s unexpected moments. Your children will thank you for this later.

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The 1Life Life Changer Award

The DStv Mzansi Viewer’s Choice Awards were launched last week and with it, headline sponsor – 1Life, launched a socially influential award category; The 1Life Life Changer Award! This award is in a class of its own – aimed at encouraging all South Africa’s doting celebrity fans to not only vote for the who’s who, but to vote for someone in their community who is socially influential and really changing lives through their commitment to those less fortunate.

“We are very proud to be the headline sponsor for the DStv Mzansi Viewer’s Choice Awards, where developing and recognising local talent – whether in business, on the sports field, or in the performing arts – is not only empowering and uplifting, but certainly, life changing,” says Laurence Hillman, MD at 1Life.

“This sponsorship really holds true to our mantra of Changing Lives, and I believe that the addition of the 1Life Life Changer Award generates an even stronger alignment to this concept, as it provides an excellent opportunity for South African’s to be the voice of the people, to nominate someone who they believe is truly socially influential in the community – someone who is significantly changing lives,” continues Hillman.

The 1Life Life Changer Award will allow viewers to nominate everyday people from their communities, anywhere in South Africa. Nominees will then be short listed where a panel of judges, including representatives from DSTV, Mzansi Magic and 1Life, will decide on the most deserving nominees.

The winner will be selected based on their social impact in the community, their continued motivation for the sustainable management of their projects and the positive/long lasting effect of these projects on the communities in which they operate. The winners, as well as their nominator, will win a cash prize of R50 000 each.

“There is no doubt that people working in their communities are short-funded, struggling to keep up with day to day demands and merely need a helping hand to continue to do the great work they are doing. This award empowers consumers to be part of the change, to choose these winners for themselves and to identify someone who not only needs the funding but deserves the recognition for their commitment to changing the lives of those around them,” says Hillman.

“We look forward to the upcoming weeks of ongoing nominations and encourage all South African’s to get involved by voting, not only for the nominees but very importantly, to give back by nominating those people in their communities that are truly change agents!” concludes Hillman.

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