The term ‘life insurance’ may be familiar to many of us, but what does it mean and how can you make it work for you? Did you know that it is possible to use it while you are still alive? Our ultimate guide breaks down everything you need to know about life insurance and how you can find the right fit.What is life insurance?Life insurance
is a policy that pays out a lump sum to your loved ones who are listed as beneficiaries to take care of everyday life expenses upon your passing. Policies can range from a minimum of R50,000 to R10m in South Africa. It is also created to take care of major life changes that can happen in your life such as death, being diagnosed with a terminal illness or disability.
However, it is important to note that not all policies are the same. While some insurers can offer a life insurance policy that comes with a built-in funeral cover to help you cover two things under one premium, other insurers may not offer this.
You can use a life insurance payout to take care of things such as:
Why do I need it?
- paying off a home loan
- educational costs
- everyday living expenses
- a funeral
- terminal illness medical bills
- modifying your home and more
Life insurance is a safety net that we all need, especially when it comes to protecting those we care about. If you are someone who is planning on buying a house, having children, getting married or simply looking to make a charitable donation to the less fortunate at some stage of your life, having life insurance is vital.
While It is designed to grow with you, it is important to get it while you are still young, and the premiums are affordable. “It is never too late, until it is too late. This seems silly in its simplicity but when thinking about life insurance, it is critical. Life insurance is something that becomes increasingly difficult to obtain affordably as you age or your health declines. Don’t wait until it is too late,” says CEO of MiWayLife Craig BakerHow much does it cost?
Taking out a policy that will be valuable to you and your loved ones boils down to getting something that is tailor-made for your needs. Looking at your current expenses along with future plans that you may have such as paying off your debt, buying groceries, saving for tertiary education, purchasing a home or introducing a new member to the family are things that need to be considered. You can apply for an obligation-free quote
to see just how much you could be paying.How are my premiums determined?
If you are wondering what insurers base their premiums on
, you will find that it is straightforward. Life insurers use the underwriting process that considers your age, health and lifestyle to determine what premiums you will be paying. Therefore, it is equally important to get life insurance while you are still young.
Most insurers offer cover that starts at R1.5m and can go up to R5m for as little as R149 a month, which is the equivalent to the price of a pizza.
However, checking the premiums of your policy along with the increase that comes with it per annum or every five years is important. This can help you budget accurately for it and avoid cancelling it because of its affordability.When does a policy payout?
Your loved ones can place a claim on your policy
as soon as you pass away. However, knowing what is needed when placing a claim
can make the process less daunting. This can differ from insurer to insurer, which is why it is important to check your insurers claim process to avoid any frustration. Your insurer will then assess the claim and check that everything is in order to avoid any fraudulent claims. The time frame can vary from a few weeks to months based on the information that is submitted and the investigation on the insurer's side.