Clarify what your life insurance will or won’t cover

It’s important to be aware of what is and isn’t covered by your life insurance policy.

Exclusions detail possible claim events which may not be covered, such as death due to war, civil unrest, epidemics, suicide and even being out of your home country for a protracted time.

Most policies won’t pay out if you willingly relocate to a territory in a state of declared war and possibly even civil unrest without advising your insurer in advance.

If suicide occurs within two years of the policy being taken out it may not be covered.

Vigorously assess the policy’s premium pattern, to understand how these may fluctuate over time. Although premiums may increase with inflation each year, premiums often also increase with age.

An alternative is a level premium pattern, which usually just smooths out the increases you’d get in an age-rated policy over the policy’s duration.

However, if you expect your earnings to increase with time, an increasing premium pattern might be best.

Be aware of waiting periods. A policy may have a six-month waiting period during which no cover is provided for death by natural conditions.

Specify a beneficiary for any payouts after death. Otherwise proceeds might be paid out to your estate, which can have very different tax implications.

Kagura is at Standard Bank