Life insurance; the basics

Life insurance; the basics

Whether you’ll leave a spouse and children behind or other loved ones such as siblings or elderly parents, with life cover you can make sure they are looked after should you pass away. Here are some points to consider:

Even if you are a stay-at-home-mom who doesn’t provide an income, you will still leave a major financial gap should you pass away as you run the household and take care of all the domestic aspects of the family.
Take out life insurance while you’re young and healthy.

It is important to take out life insurance cover as early as possible, preferably when you’re still young and healthy and before you have a family that relies on you.

Make sure you are not under-insured

Many life insurance policyholders are under-insured, and most are not even aware of it. Do your calculations and determine how much money your beneficiaries would need. Don’t avoid looking at worst case scenarios, such as what would happen if you were to pass away tomorrow.

Beware cheap policies

Remember that saving a little bit on premiums every year by taking out life cover at a risky insurance company may not work to your advantage in the long run, come crunch time. Paying a bit more by taking out life insurance from a reputable company will generally be well worth your while. Would they be able to afford to support themselves in terms of monthly bills, school fees, rent or bond repayments, and medical aid?

Stick to the facts

When applying for life insurance, be sure to stick to the facts. Don’t try to change information in an attempt to get lower premiums. Life insurance companies do thorough investigations before approving applications and of course, before paying out large claims. Health problems that you have managed to conceal initially may come to light at a later stage, resulting in non-payment.