Why you should not cancel your funeral policy
By Farai Francis Zhara
Covid 19 has affected the disposable income of many people worldwide. To Zimbabweans this was like adding salt to a wound because people were even struggling to keep up before this era. People are busy finding ways to increase disposable income by removing possible costs and many people will always first want to do away with funeral policy when in fact it should be the last expense to be removed.
You are not going to be refunded
You surely do not want to lose all what you have contributed for nothing. It is unfortunate that funeral policies are like car insurance, you cannot claim refund even if you did not claim anything during the period simply because you were covered during the period. You can only be refunded for deductions made after you have cancelled your policy but the rest forget about it…aah so why bother?
Your family will be exposed
Funeral insurance is taken to protect the proposer’s family and other beneficiaries in future if anything happens to them. Some policies have after burial cash payments done well after burial to allow them to keep paying for things like education, and day-to-day expenses. Such payments assist the bereaved family to adapt to life without a bread winner. All this will vanish when policy is cancelled and will leave your loved ones at risk should anything happen to the proposer or beneficiaries.
You might never get cover at this premium again.
The younger you are the cheaper the policy under normal circumstances. What this means is that if you cancel your policy after three years you will be charged more if you are to join again because you are now older than before. The difference may seem to be small but it is very significant if you consider that you will pay this monthly for the next` twenty years or so. This premium will even be higher if you are diagnosed with certain type of diseases, the insurer will put premium loading but if diagnosed while you already have a policy there will be no premium loading.
Many funeral policies mature
Many funeral policies do mature after a certain period like twenty years (it varies though) and if you cancel it means you have lost all those years you have contributed. On maturity of a funeral policy you do not get paid anything but you will not be expected to pay any premiums whilst still on cover. It is surprising that someone may decide to cancel a policy of more than ten years and when the policy is more than half way through.
So basically this is why you should not cancel your policy but amazingly some clients still present flimsy reasons like these below. If you are one of them then you need to be reminded of the points above. Never cancel your policy as a result of these reasons:
Want to join a friend or a relative’s assurer
Some people want to cancel their policies simply because they want to join a friend, work mate or a relative’s assurer. This is unbelievable but very true. To leave all your benefits just to follow a friend.
You never received anything from the company
After observing that this other insurer has distributed calendars, diaries, pens, caps and T shirts you decide to cancel policy. If you are one of them then you need to reread the above points. You cannot opt to lose your policy because of a branded pen which costs less than a dollar.
You have never seen your assurer in action in your home land
After having attended a few burials in your home land you now want cancel your funeral policy simply because all these were conducted by other insurers and you have never seen your insurer in action in your home land. Really? If so then let your beneficiary die and see if you do not see them there. Why would you want to see them in action when you could simply research (if in doubt) if your insurer is genuine probably by simply checking at IPEC (Insurance and Pensions Commission). If it is registered then sit back and relax, you are covered.
The insurer rejected your relative or colleague’s policy.
You heard that your friend, workmate or relative’s policy was rejected by your insurer and you now decide to cancel. What does your friend’s policy have to do with you? Policy contracts are different and so are treated differently and beside this you may have been misled as to why the claim was rejected. At one time a manager at this other company coerced his staff to cancel policies simply because the insurer had rejected a claim of one of them but he was later surprised when told that his staff member had last paid premiums a year ago. It is important to know that at times people will not tell others the truth when their claim is rejected so bear in mind that his/her policy is not yours. Policy benefits varies a lot and so do not compare. The best you can do is to ask your insurer if your policy is in order.
So you see there is absolutely no reason why you should cancel your policy but however if you have made up your mind no one will force you to continue with this contract when you no longer wish to continue with it. You are free to notify your insurer about your decision and in most cases they will ask you to put it writing for the sake of future reference.
Farai Francis Zhara holds an MBA from the National University of Science and Technology and a BCom from Midlands State University. He is a certified client services practitioner with over a decade in the insurance sector. He writes in his personal capacity. [email protected]
