Funeral covers are legally binding contractual arrangements that help beneficiaries to cushion themselves against financial loss in case of death related eventualities.
It is a way of protecting your monthly cash flow against risks. For an affordable monthly premium, you get to protect yourself against a relatively large lump-sum payment.
You as a beneficiary enters into a contract with cover providers, like in this case Kenya Urban People Association ( KUPA- Kenya), and sign up for a relatively small monthly risk premium for a lump- sum funeral cover in case you lose your life or that of your loved one.
Funeral covers help you to manage your financial life within a monthly budget so that you do not have to sell assets or incur debts to meet financial obligations in case of unforeseen events.
When you decide to enter into a funeral cover plan, you should have the following in mind;
Understand the role it plays for your overall financial security
Having a funeral cover plan is very important in protecting yourself against financial stress during difficult moments. Even though the plan cannot prevent death or ease the pain of losing a loved one, it eases the path ahead. Therefore being able to cover your own funeral or that of a relative reduces financial stress it times of grief.
Who are you likely to be responsible for?
Funeral cover plans for you, your family and relatives prevents undue financial pressure on your kins in case of death.
Most individuals are responsible for the funeral expenses of their parents.
They will also be expected to contribute to extended family like aunts, uncles, nieces, nephews and grandparents.
How much cover do you need?
The cost you are likely to incur on a funeral will always depend on the ambitions of your family. They will determine the type of send off you would give to your departed one and how much that will cost. For instances involving extended families, you might have to spend on them even after the death of their bread winner. This requires a plan that enables you to spend so little in the funeral process.
As a potential client, you need to clearly understand your needs. This will help you to focus on paying for only what you want and not just what the cover provider has in their products catalogue.
Check out the value you get for your money, that is, how much premium you will pay against the level of benefit you will get in return.
Consider how practical it is to claim the cover services and how the services are important during eventualities.