Living without life insurance is simply a gamble for most people. Almost everyone has debt and most of us have families who would have to struggle financially if we were not there to help provide for them. You can avoid these worries and gain great peace of mind with the right life insurance policy. Before you begin looking, take a moment to learn about the different types of life insurance so you can make an educated decision when it is time to purchase a policy.
In South Africa, there are three main types of life insurance.
Term life insurance is your least expensive option. Cover is provided for a certain amount of time (term). Decreasing term insurance is the most popular form of this cover. A great option for families, this cover can be linked to specific debt such as a home loan. As the debt decreases, so do the premiums. If a term life policy is not linked to a debt obligation, payouts can be used for any purpose. The policy can be renewed at the end of the term, but the premiums will be higher upon renewal.
Whole life insurance is a great option if you want to provide financially for your family in the event of your death. Whole life is called permanent insurance which means it remains in effect as long as you pay the premiums. Whole life policies never need to be renewed, so the premiums stay the same regardless of your age. Some policies incorporate a savings option you can borrow against if needed. Whole life polices will usually cost more than an equivalent amount of term insurance because the cost is averaged.
Amongst the life insurances that do not renew and neither do their premiums adjust is Universal life insurance. Universal life insurance is unique in that unlike whole life policies, this kind of insurance offers other financial services, for example savings and investment policies. You can return the policy and claim your accrued savings. The policy holders can however incorporate another person into their policy, take care of their investments or use their funds to cater for premium payments. All this uniqueness makes universal life insurance the most exorbitant cover choice.
HIV-positive South Africans also have the option to purchase life insurance. Thanks to advancements in the treatment of the disease, South Africa is now one of only two countries in the world to offer life insurance for people with HIV-AIDS. Premiums for these policies are somewhat higher, and providers will require these customers to maintain antiretroviral treatment.
If you want to have a set of policies for you and your family, the best way is to ask yourself a set of 3 questions.
What are the premium payments? What happens if I miss a payment?
Will the death benefit of this life insurance policy be enough to support my family?
The question is: will this policy be the best one to serve my needs? What sort of coverage will it provide me?
Life insurance is an important component of your family's financial protection plan. Purchase a good policy and you will be able to protect your family from financial ruin if anything should happen to you. Your loved ones will be able to maintain their lifestyle even if you are no longer there to support them. Both you and your family will have peace of mind if you get a good life insurance policy.
In South Africa, there are three main types of life insurance.
Term life insurance is your least expensive option. Cover is provided for a certain amount of time (term). Decreasing term insurance is the most popular form of this cover. A great option for families, this cover can be linked to specific debt such as a home loan. As the debt decreases, so do the premiums. If a term life policy is not linked to a debt obligation, payouts can be used for any purpose. The policy can be renewed at the end of the term, but the premiums will be higher upon renewal.
Whole life insurance is a great option if you want to provide financially for your family in the event of your death. Whole life is called permanent insurance which means it remains in effect as long as you pay the premiums. Whole life policies never need to be renewed, so the premiums stay the same regardless of your age. Some policies incorporate a savings option you can borrow against if needed. Whole life polices will usually cost more than an equivalent amount of term insurance because the cost is averaged.
Amongst the life insurances that do not renew and neither do their premiums adjust is Universal life insurance. Universal life insurance is unique in that unlike whole life policies, this kind of insurance offers other financial services, for example savings and investment policies. You can return the policy and claim your accrued savings. The policy holders can however incorporate another person into their policy, take care of their investments or use their funds to cater for premium payments. All this uniqueness makes universal life insurance the most exorbitant cover choice.
HIV-positive South Africans also have the option to purchase life insurance. Thanks to advancements in the treatment of the disease, South Africa is now one of only two countries in the world to offer life insurance for people with HIV-AIDS. Premiums for these policies are somewhat higher, and providers will require these customers to maintain antiretroviral treatment.
If you want to have a set of policies for you and your family, the best way is to ask yourself a set of 3 questions.
What are the premium payments? What happens if I miss a payment?
Will the death benefit of this life insurance policy be enough to support my family?
The question is: will this policy be the best one to serve my needs? What sort of coverage will it provide me?
Life insurance is an important component of your family's financial protection plan. Purchase a good policy and you will be able to protect your family from financial ruin if anything should happen to you. Your loved ones will be able to maintain their lifestyle even if you are no longer there to support them. Both you and your family will have peace of mind if you get a good life insurance policy.
About the Author:
Tom Martens is the content syndication coordinator at Lifeinsurance-Southafrica.co.za South Aricas leading Life Insurance and Life Cover portal.
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