With over 30 years of experience in the insurance industry, we know just about all there is to know about Life cover options in South Africa. We would like to share that knowledge with you so you can make the best decision for you and your family.
In South Africa, there are two main kinds of life cover– term and whole. The type that is right for you depends on a number of factors. Let’s take a look at these options and explore how to tell which one you need.
Whole life cover
It is called whole life cover because this type of life insurance covers you for your entire life. It does not matter if you live to 65 or 105, your cover will remain active and when you pass away your beneficiaries will receive a lump sum payout.
As you age, your premiums will likely increase because your risk increases. However, the amount you are insured for can also increase so your loved ones will receive a payout aligned with inflation.
Some whole life insurance policies have an additional investment benefit, where the amount the insured person pays each month is invested and paid out once their beneficiaries claim on the policy.
This type of life cover is ideal, as your insured amount increases as you age and you never need to worry about your loved ones receiving their payout. However, it can be expensive, especially as you get older. Similarly, the longer you leave it to take out life cover for the first time, the more expensive your premiums will be. So if you are thinking of getting a life cover quote, now is the time to do it.
Term life insurance covers you for a set amount of time at a fixed monthly premium. It is usually the more affordable option but not necessarily the better one. Let’s say you have a term life insurance policy that remains active until you are 65 years old. If you live past this age, your policy is no longer active and you will need to take out another one in order to be covered. It also means that you will have paid all those premiums into your policy and received nothing back, which is not a good financial move.
Because your premiums do not increase, your insured amount also does not increase, so your payout might not be sufficient for your loved ones due to inflation. Let’s say you are covered for R1 million now. If you pass away in 20 years’ time and your policy is still active, that R1 million is not going to go nearly as far as it might have when you first took out the policy. Life cover is meant to help those left behind maintain their lifestyles or pay off debt to live more comfortably when the insured person passes away. With term life insurance, this might not always be possible.
However, if your budget is very tight right now, this temporary life insurance option could be right for you providing you work towards taking out whole life cover when you can to ensure your loved ones are looked after no matter when you pass away. It is better to have term life cover than no life cover at all.
Life Cover Quotes
We have used our 30+ years of experience to create a Whole Life Cover that gives you peace of mind knowing your family will be looked after when you pass on. Get an Auto & General Life Cover quote for between R200 000 and R10 million today and we will include a R50 000 funeral benefit on top of the payout.