Lifetime Insurance In Southern Africa
Life Insurance in South Africa is needed when a person has a wish to provide a sum of money large enough to cover debts or provide an income for family members after their death.
The life cover will only be payable at death, regardless of when the death occurs. All stages and events that people experience in life create different financial needs and it is important that people forward plan to ensure that the necessary funds are available when these events happen.
The purpose of this insurance cover is that it will make sure that the person who is insured will leave funds to their dependants if they happen to pass away before they have earned enough through work, savings etc and make sure that the remaining family members do not suffer financial hardship.
Health and Life Insurance is believed to have begun in around 600 BC by the Romans and the Greeks. The way it worked was that should the breadwinner die in a family, the insurance society paid the costs of burial and looked after the family afterwards.
Whilst today’s insurance companies are more sophisticated, the basic principles from those early Roman and Greek days remain.
Death is the one certain event that faces us who live on earth but we do not have a crystal ball to tell us when we will die. Here is where the risk comes in. If you knew when death was going to occur, you would probably make sure that you were free from debt and had money put aside to make sure that your dependants would not suffer any financial hardships
You don’t have this knowledge, however, so its not a practical option to try to achieve this unknown factor. This is why insurance is a good idea as it will ensure financial stability for those remaining as it will pay out a pre-determined sum of money on death.
The purpose of the money is to pay off any debts outstanding when you die e. G. Credit cards, mortgage, car loan etc) so that your family are not burdened with this task. When taking out life cover, you are entering into a legally binding agreement. The insurance company agree to pay out an agreed lump sum when to die to your beneficiaries in return for monthly payments (called premiums) of a set amount.
To apply for life cover, you complete an application form which asks a range of questions for you to answer. You need to answer in complete honesty as the insurer will use this information to assess the risk.
The size of the premium that you will pay to your insurance company will depend on the amount of cover you select, in addition to your risk profile. The term cover relates to the amount of money that your life is insured for. Your risk profile is determined by looking at your age, hobbies, gender, work you do, whether you smoke or not etc. The higher your risk and cover is, the more you will have to pay for cover.
Insurers are pretty quick when it comes to settling your affairs and paying out on death. All they usually need is some form of identification coupled with your death certificate to pay out so you don’t need to fear that it will take a long time before your family get paid.
So there you are. Life insurance is an inexpensive, simple option to ensure that when you do finally die, that your family will be financially catered for.
Are you looking for more information on life insurance in South Africa? Inside info now in our Baby Life Insurance overview.