Using life cover to protect your loved ones is just plain common sense. Statistically we are all at risk; the only absolute guarantee in life is that we will die. That is why when it comes to insurance, it is better to have it and not need it – than to need it and not have it.
Reasons for life cover
- Provide financially for their families or businesses in the event of death
- Ensure their children are provided for by leaving enough money to maintain their current lifestyle and education needs.
- To ensure that your debt will be covered! You need to ensure that there is liquidity in the estate (cash available) to pay off car finance loans, house mortgages, credit cards, etc…
Important points regarding life cover
- Life cover premiums are based on your age, therefore the younger you are the cheaper the premium.
- The cover amounts should be based on a proper financial needs analysis completed by a financial advisor
- Life cover may take on average up to 30 days to be paid out and funeral cover can be paid out within 72 hours on receipt of a valid death certificate
- A life assurance policy can be paid to any nominated beneficiary or it can be ceded to a bank or a 1st party
Criteria for applying for life cover
To quote risk benefits, a premium is produced based on the following criteria:
- Age, Gender, Education, Current Income, Occupation and Smoker status
- Medicals may be called for once an application has been underwritten by the life assurance company. These medicals are paid for by the assurance company.
Life cover can be declined
They can decline cover if you are diagnosed with certain life threatening conditions and the condition in question is not under control. This could be HIV, Diabetes, High Blood Pressure, Cancer, etc.
What then are my options?
Funeral plans and plans with limited underwriting or using an investment product such as an endowment.