Why you need life insurance:
Understanding life insurance begins with a basic idea of what it is and why you need it. To put it simply, life insurance enables you to live with peace of mind, knowing that your loved ones will be financially stable after your death. You can live peacefully with the knowledge that your loved ones will have enough money to ensure that your outstanding debts are paid off and that they will have enough money for the foreseeable future.
What kind of life insurance policy you can get in South Africa:
In the South African context, there are 4 main types of life insurance policies available.
Credit Life Insurance
This cover pays a single debt or multiple debts upon the death of the insured party. If you get an approved loan, you are required by law to get this type of insurance to avoid non-payment.
A fixed term insurance policy is one that you purchase to cover you for a set period of time at a set monthly rate.
A decreasing term insurance is when your monthly payment decreases over time and so does your cover.
Whole Life insurance
This is whole life insurance that you contribute to for the duration of your life.
Universal Life Insurance
This cover is similar to whole life insurance, except some of the money goes into an investment account. This is essentially a for-profit life insurance scheme.
When trying to decide on the right type of life insurance policy for your needs, it’s important that you make an informed decision by weighing the pros and cons of each one.
When searching for the right type of life insurance, an accredited financial advisor can help by conducting a detailed financial needs analysis. He/she should also be able to provide you with a comprehensive list of affordable options that can best meet your life insurance needs.
What determines life insurance premiums?
- Lifestyle factors
- How much insurance you need
- Personal details