The Reality of Multiple Policies
Research by FinMark Trust and the FSCA has consistently shown that many South African consumers hold more than one funeral policy. In some cases, individuals hold four, five, or even more active policies — often taken out through different brokers, funeral parlours, or employer schemes.
Why People Hold Multiple Policies
- Community pressure: Cultural expectations around funeral dignity lead to layered cover
- Sales pressure: Aggressive sales practices by intermediaries encourage additional policies
- Job changes: Employer-linked group schemes create additional cover without consolidation
- Distrust: Concerns about a single policy not paying lead to redundancy
The Risks
Over-Insurance
If your combined cover significantly exceeds your funeral costs, you are paying premiums that deliver no additional value. Those premiums could be redirected to savings, education, or other forms of protection.
Administrative Burden
When a claim arises, the family must submit claims to each insurer separately. This multiplies the documentation burden at a time of grief.
Lapsing Risk
The more policies you hold, the greater the risk that one or more will lapse due to missed premiums, leaving gaps in your cover.
Your Legal Rights
- You are legally entitled to hold multiple policies
- No insurer can refuse to pay a valid claim simply because you hold cover elsewhere
- Each policy is a separate contract — the insurer must honour the terms of each one independently
The Duplicate Policy Project
The insurance industry, through the FSCA and ASISA, is developing mechanisms to give consumers visibility into their active policies. The goal is not to prevent multiple policies but to ensure consumers make informed decisions about their cover.
What You Should Do
- List all your active funeral and life policies
- Calculate the total combined cover
- Compare this against your estimated funeral costs
- If you are significantly over-insured, speak to a licensed broker about consolidation
- Never cancel a policy without first confirming that replacement cover is in place and past the waiting period
Contributed by Socinga Africa Holdings (FSP 46620). This is educational content only and not financial advice.