Unpacking the value of life, disability and funeral cover
Creating a living legacy is an important ingredient in life for many. However, the inevitability of passing on highlights the importance of closure a celebration of life brings to the impact on the legacy left behind.
The face of funerals and funeral cover changed indelibly with the still lingering Covid-19 that publicised leading personalities’ death and almost overnight, discussion of death was no longer taboo as few were untouched by the trauma of the pandemic. It also meant a rise in awareness of the value of funeral cover with recognition that this was no longer the territory of those heading towards their golden years, but applied to the loss of children and younger adults.
A funeral cover policy requires a monthly premium that can be structured according to available disposable income. On passing the beneficiary’s nominated person is paid out a specified amount and able to make the requisite funeral arrangements. The basic advice recommended is not to choose the cheapest option, but to optimise the value the policy will realise.
People are under severe financial pressure with the global and local economic headwinds taking their toll. There are companies like AVBOB which do give premium relief in the event of such crisis as retrenchment or loss of a breadwinner, however, the importance of maintaining open communication and a transparent relationship with the selected insurer cannot be stressed enough.
This is not just to advise of problems, but to enable the insurer to help policy holders to prevent being over-insured, assist in making sure the cover is adequate, regularly evaluate cover appropriateness and help when financial difficulty affects payment of premiums. There are always options to ensure cover is maintained.
Also, when signing up for a policy, disclose all information and let your family know about the funeral cover you have in place and where to find it in the event of your death. Also understand the waiting periods and exclusions. Cover for natural death normally comes with a waiting period, but accidental death provides immediate cover.
Flexibility
“A very important factor to consider is whether the insurer is going to pay in the event there’s a claim,” says Anthony Miller, CEO of insurers, Simply. “Some insurers have a bad reputation for repudiating claims and are to be avoided.
“Another important consideration is all-in cost. We don’t try to be the cheapest funeral provider in the market. We try to offer very flexible cover so customers can get what they need without having to take anything they don’t. By doing so, we often save customers a lot of money versus the alternatives which can typically be quite rigid.”
Simply’s operating model is different to other insurers in the market. While they’ve seen strong growth targeting retail customers with their combinations of life, disability and funeral cover, they’ve also been successful getting SMEs to take cover for their staff — paying the premiums on behalf of their employees and ensuring cover is in place when tragedy strikes.
“Even where employers pass the cost on to their employees, the cost savings achieved via more efficient distribution and effective collections are material for the employees,” says Miller. It’s also a great way for employers to add value to their employees at low or no cost.”
While past perceptions are that funeral cover was only for this mass market, this has shifted to the perception that everyone needs funeral cover and in the light of concerns about the high costs of funerals here, effectively every South African needs a funeral plan in place.
“The optimal plan should cover the cost of burial and related expenses such as airtime and groceries which have not been planned for,” says Phillip Kassel, executive financial advisor, Liberty Life. “To keep up cover, take up a plan that is not excessive. You can cover up to 32 family members and premiums are age rated, but do choose a plan that you can afford.”
This is a traditional market and the bottom line is to choose an insurer that provides certainty and has a strong and dependable brand. Innovation, be it digital or burial methodology is only valuable as long as it doesn’t diminish the value proposition required and when uncertain, use the advice of the insurer or funeral parlour to guide you.
— Rebecca Haynes
Preserving the environment with modern technology
Aquamation was first introduced to South Africa by AVBOB, which offers this as an option through its Maitland and Pretoria branches. It is gathering momentum as a ‘green burial’ movement that promotes natural decomposition of the body and avoids using non-biodegradable chemicals and materials.
One of its most notable users was activist Anglican archbishop emeritus Desmond Tutu, who was not only known for his campaign for racial justice and outspoken anti-apartheid sentiments, but was also very environmentally conscious and wanted to use aquamation as an eco-friendly alternative to cremation or other burial options when he passed.
Aquamation advocates believe it is a far more eco-friendly alternative to an ornate coffin going into the ground and it is estimated that aquamation uses ten times less energy than a flame cremation and can reduce a crematorium’s carbon footprint by around 90%.
Aquamation might be gaining ground and awareness, but AVBOB’s CEO, Carl van der Riet, says burial wishes are also cultural- and religious-based and each culture has its own interpretation and expression.
“We are very aware and conscious of different culture requirements. It takes time to learn a deep understanding of these and we believe we have this understanding. This informs our evolving service offering and the diverse levels of our services and plans so that we can offer an end-to-end service, holding the hands of those left behind and guiding them through the complexities to ensure our support adds value at times of tragedy,” says van der Riet.
In a nutshell, aquamation or alkaline hydrolysis involves the body of a person being immersed in a mixture of hot water and a strong alkali, in this case potassium hydroxide, in a pressurised metal cylinder. The number of hours involved in total decomposition depends upon the size of the deceased.
Sterile remains
Everything except the bones is digested and liquefied and the liquid can safely be discarded. The bones are then dried in an oven, reduced to dust and these are returned to relatives in an urn and can be treated as the relatives wish, just like other ashes from a flame-based cremation approach.
Because aquamation completely hydrolyses both RNA and DNA and destroys all pathogens, all viruses are completely denatured and the end result is a sterile solution of amino acids, salts, sugars and nutrients – all by-products of natural decomposition.
Originally developed in 1990 to dispose of the bodies of lab animals, it has played a significant role in the disposal of carcasses affected by such virulent illnesses as mad cow disease. In the 2000s, it moved into the medical school sector and was used to dispose of human cadavers donated for medical research.
“We are also keenly aware that we have both a direct and indirect impact on the environment. Aquamation is just one way that demonstrates that we are deeply committed to preserving our natural resources and we are still the first and only funeral services provider in Africa that offers aquamation as a process that uses water to return us to nature,” concludes Van der Riet.
Unlocking value through constant evolution
Companies such as AVBOB understand the value of cover and celebrating its 105th year in August since its humble beginnings in Bloemfontein as a society to support families. It continues to support South Africans every day when tragedy hits their families and this can hit at any age.
“We started as a mutual organisation and believe maintaining this powerful business model is a critical differentiator of our business,” says Carl van der Riet, AVBOB’s CEO. “We believe it provides huge value to our customers. As Africa’s largest mutual assurance organisation we can directly offer benefits to our policyholders that no other insurer can.
“Our mutual status drives our ethos, purpose, and competitive differentiation. We offer our members the opportunity to participate in the value we create, whereas other insurers are mandated to create shareholder wealth. For example, in the 2021/2022 financial year we paid out R2.7-billion in policy benefits and shared over R550-million of our profits with our more than 2.5-million policyholders covering 8.5-million lives.”
Part of its ethos of the personal touch, as AVBOB has grown in reputation and service offering, including diversifying into the business-related manufacturing side of the business, it continues to support its nationwide network of 350 branches.
“It comes down to ‘always putting people first’, be it policyholders, employees or members of our supply chain – the statement by the company’s founders that is the golden thread through everything we do and stand for,” continues Van der Riet. “While there are companies closing branches for their own strategic objectives, we firmly believe that having accessible branches where the bereaved can have direct contact with the experts handling their personal loss is a fundamental service. We offer a complete package and an integrated service and provide both funeral insurance and funeral services.”
“In pursuance of our shared value objectives, we accelerated the digitisation of our customer and supply chain interactions in order to drive modernisation and growth. AVBOB has always been forward-thinking in its adoption of technology and IT prevails throughout the business. IT delivers the tools, foresight and agility to serve both within and outside the organisation.
Accessibility
“The AVBOB Groups’ digital agenda is adding greater value and creating a purposeful, sustainable, inclusive, consistent and service-orientated digital workplace for customer and employees alike, building business resilience and unlocking value through innovation.
“Everything now happens in real time and in this service-driven world, we need to offer immediacy, personalisation and accessibility to our clients to position the business for an era marked by growing customer enlightenment. We also need to ensure that the tools we have are available to our 5 000-strong nationwide sales force.
“The challenge we continue seeing is the burden of providing for funerals falling on the shoulders of an unprepared and financially non-resilient family, lacking adequate or having no funeral cover and getting into debt or selling off assets when the family suffers a loss.
“It’s essential to be prepared for the unexpected and ensure you can provide for financial needs – not just in terms of funeral cover, but also for the short, medium and long terms. Leaving a legacy means effective financial planning at all life stages and managing finances in order to achieve life goals.
“Funeral cover provides the financial safety net for your own or a loved one’s funeral and this is vital considering that a funeral in South Africa can cost upwards of R80 000. This is not a cost legacy you want to leave behind for your loved ones — especially if it means putting them into debt.”
For more information, visit: www.simply.co.za/mail-and-guardian
or www.avbob.co.za/Company/FuneralOptions
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