Retirement Planning
In the 2025 FNB Retirement Survey, 78% of respondents South Africans over 60 said that they have funeral cover, but only 38% confirmed having life insurance. The gap says a lot. Most South Africans see funeral policies as essential because of the rising costs of burial and the deep cultural expectation to give loved ones a dignified send-off. Life insurance, on the other hand, is less understood despite its role in securing long-term financial stability for those left behind.
It's important to understand the functions of these two types of cover, and how they can work together to protect your finances and the people you care about.
Funeral cover - quick help with immediate needs
Funeral cover is designed to pay out quickly—usually within 24 to 48 hours of a valid claim - to meet immediate funeral-related expenses. These costs are significant in South Africa, often ranging from R30 000 to R100 000, depending on catering, travel, cultural rituals and the preferences of loved ones. Expenses can begin even before the funeral, with preparations and gatherings that happen before the event.
Considering these costs, it's a good thing that, 78% of over-60s surveyed in the 2025 FNB Retirement Research have funeral cover, with 75% of those people saying it the cover will reduce the financial burden on their families. The appeal is not just financial. Funeral cover offers peace of mind, a sense of dignity, and the ability to care for extended family members. Importantly, this kind of cover is popular across income groups, as many South Africans take responsibility for funeral expenses beyond their immediate households.
Life insurance - for long-term financial security
Life insurance, on the other hand, provides a larger lump sum payout designed to help families cope with financial challenges after a loved one passes away. This could include paying off debt, supporting a spouse, funding a child's education or leaving behind an inheritance. The 2025 FNB Retirement Survey shows that only 38% of respondents have life insurance. The biggest motivator for those who do is the desire to leave a legacy. In addition to the inheritance aspect, life cover can also help maintain a family's standard of living after the funeral - something that is often overlooked.
A shift in attitudes and value perception
The research also shows that attitudes toward life cover change with age. For younger consumers - particularly those under 60 with financial dependants - life insurance is seen as critical. There is a clear understanding that a sudden death at this life stage could cause serious hardship for surviving family members, especially when there are children and debt involved. Among retirees, however, sentiment becomes more fragmented. As families become a bit more financially independent in some segments, many older members question the value of retaining their life cover. The desire to "rather benefit from my money while I'm still alive" is becoming more common, with 34% of retirees saying they would prefer to convert life cover to cash, and 31% indicating a preference for rewards or benefits that can fund retirement directly.
This behavioural shift presents an opportunity for insurers to innovate more with the design of their life insurance policies so that they continue to add value to customers throughout their lives. An example could be hybrid solutions that balance protection with retirement income or liquidity benefits.
Cost, trust and transparency
The research also highlights some ongoing frustrations. Older consumers are wary of long-term premium increases without corresponding boosts in cover. This affects trust and raises concerns about fairness. While this sentiment persists across the industry, efforts by insurers like FNB Life to offer clients a choice of premium and cover growth options are helping to shift perceptions by creating a better match between product structure and individual needs.
But the issues are broader than just costs versus benefits. Many people say they don't have cover because they don't understand it, don't see the benefit, or feel it's not for them. Others say that they feel the underwriting process invades their privacy, or that they lack access to personalised advice, which they believe is still more readily available to high-income earners.
Financial advisors have a big role to play here in helping people understand that life insurance isn't just about death benefits. It can also include extras like disability and critical illness cover, which add value well into retirement if properly understood.
While life and funeral cover are very different products, the 2025 FNB Retirement Survey shows us that, for many people, that difference isn't clear. For financial services professionals, this presents a responsibility to engage with their clients and provide the insights they need to make good decisions to move from just having insurance cover to having the right mix of life insurance and funeral cover to protect them, their finances and their families throughout their retirement years.
