The topic of death and its financial consequences are probably not considered that often in the family.
Yet it is inevitable for all of us and we need to take a close look at it from time to time.
A way to understand the cost of dying is to follow the calculation used to wind up an estate.
The costs which the executor will apply are:
Liabilities – all the things you owe
Masters fees- R 600
Executors fees – 3.5% plus VAT on all your assets executed in the estate
( this excludes policies with a nominated beneficiary)
Funeral costs
Capital gains tax above R300 000
Estate duty – above the residue over R3 500 000
The amount of life assurance you need should cover the total costs of dying as well as a sufficient amount which will maintain the lifestyle of your dependents.
This amount depends on the monthly amount needed and how long the they need to be provided for.
A financial planner will be able to calculate a more accurate amount.
Your life assurance policy then should be set against this amount including all the costs of dying as well.