TIP

CityPress - - Business -

If you like to know ex­actly what you’ll pay for a prod­uct from one month to the next, you may want to con­sider fix­ing your life in­sur­ance pre­mi­ums.

As you pay the same ev­ery month for your life cover, you have the as­sur­ance of what to ex­pect. The pre­mi­ums don’t in­crease an­nu­ally and they of­fer pro­tec­tion against in­fla­tion.

But they may not be for ev­ery­one. The pre­mi­ums are ex­pen­sive, so if you are just start­ing out in your ca­reer, this may be dif­fi­cult to main­tain. The pol­icy isn’t flex­i­ble, so you won’t have the op­tion to in­crease or de­crease pre­mi­ums. Also, the sum in­sured re­mains the same for the du­ra­tion of the pol­icy.

Lee Brom­field, CEO of FNB Life, says: “When choos­ing this op­tion, it is worth con­sid­er­ing how much the pre­mi­ums will cost you in the next 10 to 20 years so that you can as­sess af­ford­abil­ity. For ex­am­ple, the pre­mium of a 30-year-old with a 5% pre­mium es­ca­la­tion op­tion will more than triple by the time they are 55 with­out any com­men­su­rate in­crease in their cover. This of­ten leads to con­sumers not be­ing able to af­ford life cover when they need it most.”

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