Life insurance mitigates the risk around your death. It gives you peace of mind knowing that on your passing your financial affairs are in order. Life insurance is one of the most selfless things you’ll ever buy. It’s about making sure that the people you love the most are well looked after should the worst happen.
A bit on the history of life insurance here.
We’ve created the calculator below for you to do just that. Adjust the assumptions to best fit your situation.
Or have a read of out article: “How much life cover do you need”
Nowadays, almost all lenders will require you to have some sort of life insurance when you take out a loan of a significant amount.
If you are looking to cover a loan – double check that you are not doubling up on life insurance. Also be aware that you can cede a portion of the policy to the financial institution. This is to cover the loaned amount in the event that you are unable to pay due to death and sometimes lack of income.
A child will spend 12 years at school.
Say the cost of a matric year as R50 000 per annum when your child begins school.
What will matric actually cost when your child gets there in 12 years?
Simple inflation indicates that at +/- 6% your child’s matric will in fact cost around R100 000.
If you are interested in some more calculations, below is a great Life Insurance Needs calculator.
It depends largely on what you and your family want but funeral costs can get rather expensive. If you have an idea of what you want it’s easy enough to estimate this at today’s costs and plan for inflation.
More about funeral costs here.
Another way to look at Life Insurance is “leaving a legacy”.
Many of us plan to retire and not be a financial burden on our children. Any parent would also want to leave a legacy behind.
While the typical tool to do this would be an investment of sorts, a lump sum pay out at your death is an immediate and interesting mechanism to address this.
Underwriting is the process of assessing risk. There are three different processes of underwriting for differing life insurance products :
The products which these apply to are further explained here:
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This is a legally-binding document that contains a lot of jargon. Make sure you understand what you’re signing up for. Unfortunately tenants, property agents and sellers aren’t always to be taken at their word - rather make sure you understand all the terms in the OTP, and ask as many questions as you need to before you sign.
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It may come as a surprise, but a life insurance claim can often take up to a few months to pay out.
So what about the funeral costs? Well, you could take a funeral plan, or if offered by the insurer you could get an accelerated funeral benefit as an add-on to your life policy.
The accelerated funeral benefit will pay out a portion of the full benefit prior to any investigation and can be as quick as 24 hours from receiving all the required documents.
The full benefit will pay out less the funeral benefit once the claim has been assessed.
read more »When buying a life insurance policy it is very important to answer all questions honestly and accurately.
Why? An underwritten policy is priced according to your individual risk - hence all the questions. Not answering honestly and accurately could lead to something insurers call 'non-disclosure', and that could mean a policy doesn't pay out when it comes to claim stage.
So whilst it may seem like a good idea to save a few rand a month by not disclosing the fact that you smoke an occasional cigarette, you may in fact be wasting money and defeating the point of taking out insurance.
read more »