Don’t just cut all life insurance bids dead

EVERYONE has experienced the inconvenience of life insurance brokers contacting you at awkward times, through various channels, trying to sell you their product.

Most of us usually hang up the phone, ignore or delete the SMS or send all correspondence of that nature to the spam mail box.

But in reality there are several reasons why taking out a life insurance policy is worthwhile, especially if you have dependents or operate your own business.

Derek Wilson, head of hippo.co.za – which allows you to compare quotes and benefits from a range of South African life insurance providers – says many people think life insurance is an unnecessary expense where the person paying for the cover will never benefit from a pay-out or a claim.

“Life insurance is important to have for those with dependents or businesses.

“If you don’t have dependents, you might not need life insurance but you may need disability or dread disease cover. If you aren’t in debt, life insurance can be an inheritance for loved ones.”

The first type of cover to consider is whole life insurance, which lasts the entire lifetime of the policy holder. In this instance, payments will stop after retirement but the cover will remain in place. This type of cover has a guaranteed pay-out benefit and better future value. The policy holder is able to cash in at a future date and can also borrow funds against this cover.

If you are opting for fixed term life insurance cover you can choose between 10, 15 or 20 years where you will be making monthly contributions. Should you die after the term, the cover will most likely cease. Website hippo.co.za says this type of cover is ideal for homeowners who wish to have their mortgage costs covered in the unlikely event of their death.

An option that more people are leaning towards is the decreasing term life insurance policy where the premiums and pay-outs decrease over time.

For those wishing to add an investment aspect to their cover, the universal life cover option would be best. With this option, every premium payment made sees some of the money saved in an investment which means that the policy will accumulate interest over many years. If you know you are going to get into a lot of debt or you are already indebted then credit life insurance covers things personal loans, credit cards and vehicle finance. The policy will cover your debts in the event that you die so that your family does not inherit your debt.

Another option is renewable premium life insurance, based on the unpredictability of your future health circumstances with the policy increasing by a specific amount over a specified time.

The final option would be age-related life insurance which increases as you age.

Wilson said that if consumers are in doubt, hippo.co.za allows them to compare quotes and benefits.