Providing survivors with sufficient funds, should you suffer a premature death, means planning ahead and taking out some type of life insurance. All insurance money is in a lump amount, and that means it can be used to address a number of things. First and foremost, are the immediate expenses involved with estate settlement and funeral costs. Later, there will be the long-term needs of survivors. One advantage of a life insurance policy is that it allows you to make needed provisions for your dependents and survivors, and some policies offer disability benefits, as well as a retirement annuity.
There is a wide variety of life coverage in South Africa. Included in this are policies that offer term, whole and universal life insurance coverage.
Term life insurance, is coverage that lasts for a specific term of time. In other words, it is life insurance coverage taken out for a predetermined length of time, after which the coverage simply ceases to exist. This type of plan works very well if you want life coverage for a limited period. For example, maybe you only need a life insurance policy during the years it takes to pay off your home mortgage. Because it is shorter termed, this type of life insurance coverage is less expensive. The down side is, it does not have a cash value or investment potential.
Whole life insurance coverage is, as the name implies, somewhat different. It is a comprehensive plan that encompasses your whole life. A payout is assured, because it only expires upon the policyholder's death, or when the policy is forfeited. Once you are covered, you do not have to be anxious about becoming uninsurable in your senior years. Insurance companies invest the premiums you pay, and policyholders can borrow against the policy as soon a cash value is established. The cost, however, is higher than a term life insurance policy.
When you opt for a universal life coverage plan, an investment component is added into the policy. A cash value is credited for premium payments that are greater than the cost of the insurance, and every month you receive interest on that cash value. There is a possibility for rapid growth, but it is not assured.
South Africa is home to several excellent insurance companies, one of which is1LifeDirect. This company has not been around long, but they have made a favorable impression by providing customers unique products and low monthly premiums. Because they use a direct sales model, there is no middleman. This means 1LifeDirect saves their customers on the cost of premiums. Discovery Life Insurance generates excellent insurance products, probably because it draws its skill from the medical aid industry. It also has a great loyalty program.
A big name in the insurance industry, Liberty Life Insurance offers three premium options that can fit any need. RMB Insurance provides its customers with one of the largest assortments of products on the market. And last but not least, Sanlam Insurance offers both life insurance for personal coverage, as well as group life insurance.
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