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.
There are three primary categories of life insurance policies available in South Africa.
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.
If you want to secure financial security for your family in the event of your death, then whole life insurance may be a good choice. Whole life insurance is synonymous with permanent insurance which covers you for as long as you pay the premiums. While these types never need to be renewed, one benefit is the premiums remain the same, no matter what age you are. While whole life insurance policies usually cost more then an equal amount of term insurance, due to an average premium cost. Some policies will even include a savings option that you can borrow against if the need arises
Universal life insurance is also permanent insurance that does not renew and premiums never change. Unlike whole life policies, universal life insurance incorporates other financial services such as savings and investment plans. The policy can be surrendered to redeem the accumulated savings. Policy owners can choose to add another person to the policy, manage their investments or use the savings to cover premium payments. All of this flexibility makes universal life the most expensive cover option.
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.
To select the right insurance that suits you and your family, you must consider three important questions prior to purchasing a policy.
Premium payments! What are they? and what if i miss one?
Will the death benefit of this life insurance policy be enough to support my family?
What is covered in this policy? What is not covered? Does this benefit me?
Life insurance is an important decision and can be the only thing standing between your family and financial disaster if you die unexpectedly. Your goal is to find the cover that will allow your family to maintain its lifestyle without your financial assistance. Taking this step now will provide peace of mind for you and your family later.
There are three primary categories of life insurance policies available in South Africa.
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.
If you want to secure financial security for your family in the event of your death, then whole life insurance may be a good choice. Whole life insurance is synonymous with permanent insurance which covers you for as long as you pay the premiums. While these types never need to be renewed, one benefit is the premiums remain the same, no matter what age you are. While whole life insurance policies usually cost more then an equal amount of term insurance, due to an average premium cost. Some policies will even include a savings option that you can borrow against if the need arises
Universal life insurance is also permanent insurance that does not renew and premiums never change. Unlike whole life policies, universal life insurance incorporates other financial services such as savings and investment plans. The policy can be surrendered to redeem the accumulated savings. Policy owners can choose to add another person to the policy, manage their investments or use the savings to cover premium payments. All of this flexibility makes universal life the most expensive cover option.
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.
To select the right insurance that suits you and your family, you must consider three important questions prior to purchasing a policy.
Premium payments! What are they? and what if i miss one?
Will the death benefit of this life insurance policy be enough to support my family?
What is covered in this policy? What is not covered? Does this benefit me?
Life insurance is an important decision and can be the only thing standing between your family and financial disaster if you die unexpectedly. Your goal is to find the cover that will allow your family to maintain its lifestyle without your financial assistance. Taking this step now will provide peace of mind for you and your family later.
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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