No matter how much we want to spend eternity with our loved ones, we just can’t. We will all eventually pass away. When we do, we want to do so knowing that our families will be taken care of.
Ideally, each person will go to the grave without the worry of leaving his family in debt or of whether or not his loved ones will be able to shoulder his funeral costs. Personal life insurance makes this possible. However, statistics indicate that less than half of the population currently avails of life insurance.
Although many people know that getting life insurance will afford them peace of mind, some are deterred by the cost and/or the opinion that it is too complicated. It need not be. Below is a summary of the basics of life insurance, including definitions, types, benefits, and tips on where to get the best life insurance in South Africa.
What Is Life Insurance?
Life insurance is a series of payments you make over the course of your life so that when you pass away, your beneficiaries will be protected financially. This eliminates the worry of supporting your family in your absence, of leaving behind outstanding debt, and of paying for funeral expenses and medical costs in the event that your personal savings are insufficient. Life insurance ensures that your family will be able to live comfortably when you’re gone.
When you apply for coverage, you will nominate certain persons who will receive the payout after your death. These people are called beneficiaries. You can make your spouse the sole recipient or distribute your policy amongst your children. The choice/s is entirely up to you.
Types of Life Insurance
Life insurance comes in various forms, but there are two major types: whole life insurance and term life insurance. Whole life insurance consists of life coverage AND an investment fund. Term life insurance does not have the latter.
Variations of whole life insurance include universal life insurance, variable life insurance, and variable universal life insurance.
Variations of term life insurance include level term, decreasing term, and annual renewable and convertible term.
These types differ greatly in terms of costs, durations, and structure. As any insurance sales agent will tell you, not all insurance policies are created equal. It is important to scrutinize each type before signing up for one.
Benefits of Life Insurance
These are just some of the numerous benefits you will get from a life insurance policy:
- Your family won’t have to sell the family home.
- Your children will be able to continue getting a good education.
- Your family will receive an ongoing income.
- If your family has a history of chronic medical conditions, purchasing life insurance while you are still healthy can be a safeguard against future medical bills.
Where to Get Life Insurance in South Africa
When looking for reputable life insurance providers in South Africa, these names come out on top: FRANK.NET, Hollard, Old Mutual, Discovery, and AllLife. Hollard is one of the most popular, with more than 6 million policyholders across the country. Old Mutual is an old standby, serving South Africans since 1845. Discovery is a younger company (listed in 1999) known for its competitive rates and flexible policies. AllLife is also quite new in the industry, but is remarkable for its generous life covers and for providing disability policies for HIV positive individuals.