Funeral cover in South Africa

What funeral cover is, legally

A funeral policy is a life insurance policy written under the funeral class of the Insurance Act 18 of 2017: it pays a lump sum, or provides a service, to cover the costs of a funeral when someone dies, up to an amount set by the Prudential Authority.

Since 1 October 2018 every funeral policy — sold by a large insurer or a microinsurer — must also meet the product standards in rule 2A of the long-term Policyholder Protection Rules. Policies sold before that date had until 1 July 2021 to comply (rule 2A.2.2).

A policy can be individual or group. Under the Insurance Act a group policy may only be held by an employer, a fund, or an autonomous association of people who came together voluntarily for a shared purpose other than buying insurance (Joint Communication 7 of 2024, Annexure A).

How much cover: the cap per life insured

The Prudential Authority's Prudential Standard GOI 7 sets the maximum funeral benefit at R100,000 per life insured, escalating annually by the CPI inflation rate published by Statistics South Africa, from the date the standard took effect. The FSCA and the Prudential Authority quoted this as the current rule in November 2024. Rule 2A.4.2 of the PPRs forbids funeral and microinsurance benefits above the prescribed maximum.

The regulators do not publish the escalated rand figure on the documents we checked, so ask the insurer what the current maximum per life is if you want the highest cover.

Waiting periods: what the rules allow

Before selling you a policy, the insurer must ask whether you had a previous funeral policy and finished its waiting period (rule 2A.6.7). Say yes, and give the old policy details: it can save you months without cover. Every case where a policy may start paying from day one: funeral cover with no waiting period.

A funeral policy may not exclude a pre-existing illness other than through that waiting period (rule 2A.7.1), and may not exclude suicide for more than 12 months from the start (rule 2A.7.2).

Covering your extended family

Most funeral policies let you add a spouse, children, parents and extended family — the usual way to get funeral cover for parents. Each person is a separate life insured, with their own cover amount and, often, their own premium. Before adding someone, check:

• the age limits and the amount payable for each category of family member;
• whether a new waiting period starts for each person you add later;
• who receives the payout for each person — you, or the person named as beneficiary.

In a group scheme, the insurer may not cancel or refuse to renew individual members selectively (rule 2A.5.3), and may not change the terms in the first 12 months unless it can show actuarial grounds or the change benefits you (rule 2A.5.1).

Claims: the two-business-day rule

1. Report the death to the insurer (or the funeral parlour or adviser that sold the policy) as soon as possible. The claim must be recorded by the next business day, even if documents are missing (rule 17.8.7).
2. Hand in the documents the insurer lists — typically the death certificate, IDs and the claim form. It may ask only for what it needs to assess the claim (rule 17.8.5).
3. Within two business days after all required documents are received, the insurer must decide and either authorise payment, reject the claim or tell you it disputes it (rule 2A.8.1).
4. If it disputes the claim, it has 14 more business days to investigate and then pay or reject (rule 2A.8.2).

The insurer may not reject a funeral claim because you did not disclose something it never asked you about before the policy began (rule 2A.8.3).

The cash belongs to the claimant: a funeral policy may not say that the money is paid straight to a funeral parlour, but you may choose to have it paid to the service provider of your choice at claim stage (rule 2A.10). If the policy provides a funeral service instead of cash, you can ask for the stated cash value instead, without an admin fee (rules 2A.4.5 and 2A.4.7).

If the insurer rejects your claim, it must give reasons and you have at least 90 days to challenge it (rule 17.6.3). Then go to the free National Financial Ombud Scheme — see our complaints guide.

Who may sell funeral cover — and the risks with funeral parlours

• The risk must sit with a licensed insurer (a life insurer or a microinsurer). Check it on the Prudential Authority's list.
• A funeral parlour that sells policies for an insurer must be an authorised financial services provider (FSP) under the FAIS Act. Check its FSP number on the FSCA register.
• A funeral parlour that only provides funeral services, and sells no insurance, does not need a financial licence.

In Joint Communication 7 of 2024, the FSCA and the Prudential Authority said they know of a high number of unlicensed entities, including funeral parlours, that collect "premiums" and carry the risk themselves in breach of insurance law — leaving families unsure whether the money will be there when they need it. They also note that commission on funeral policies, unlike most other policies, is not capped.

Paying funeral cover from a SASSA grant

Under Regulation 29 of the Social Assistance Act regulations, SASSA may allow only one deduction a month, of no more than 10% of the grant, for a funeral policy issued by a registered insurer, and only with the beneficiary's consent (SAnews, 14 August 2025).

• Not allowed from the Child Support Grant, the Care Dependency Grant, the Foster Child Grant or the Temporary Disability Grant.
• A deduction you never agreed to: dispute it by SMS to 34548 with your ID number and the name of the company, report it at a SASSA office, and cancel the policy with the insurer.
• SASSA says it distances itself from any insurance company that uses its name: a seller who says the policy comes "from SASSA" is a warning sign.

Covering a parent: funeral cover for parents.

What to check before you sign

• The insurer's name and the seller's FSP number.
• The cover amount for each person, and the age limits.
• The waiting period for natural death (maximum 6 months) and that accidental death is covered from day one.
• Whether the premium can go up, and when (no changes in the first 12 months except as rule 2A.5.1 allows).
• What happens if you miss a premium: the grace period is 15 days for monthly premiums (rule 15A), and reinstatement must not add a new waiting period.
• Your 31-day right to cancel a new policy (rule 4.2) — see life insurance.

Sources

1. Insurance Act 18 of 2017 — Government Gazette 41388, 18 January 2018 (gov.za)
2. FSCA — Amendment of the Policyholder Protection Rules (Long-term Insurance), GN 997, Government Gazette 41928, 28 September 2018 (gov.za)
3. FSB — Policyholder Protection Rules (Long-term Insurance), GN 1407, Government Gazette 41321, 15 December 2017 (gov.za)
4. FSCA and Prudential Authority — Joint Communication 7 of 2024: review of the regulatory framework for the distribution of funeral insurance (6 November 2024)
5. Prudential Authority (SARB) — list of licensed insurers (live register, seen 29 October 2026)
6. FSCA — search for authorised financial services providers (seen 29 October 2026)
7. SAnews (GCIS) — SASSA concerned over unlawful deductions on social grants (14 August 2025): Regulation 29, one funeral deduction a month, at most 10% of the grant
8. National Financial Ombud Scheme South Africa — About us (seen 29 October 2026)