Life insurance is one of those things that few people could fail to benefit from. It offers peace of mind to the policy holder and financial support to its beneficiaries. If you need a list of reasons to get life insurance, here are a few to get you started.
The most obvious part of life insurance is that in the event of your death, it will help to provide for your family. It works as simply as this: because you have been paying your monthy premiums, the company that holds your insurance policy will agree to pay a specified lump sum of cash to the benificiary listed on your policy (this is the person or people you designate to receive the death benefits).
Your beneficiaries are not restricted in how they use this money. That means that even if you die, your family can pay off debt, keep their home, go to college – in essence, your family will be able to maintain its lifestyle without your assistance. Of course, all this depends on which type and how much life cover you choose to buy.
In some instances, the benefit may be used to pay off money you owe. Some people may choose to link their largest debts to a decreasing term insurance policy due to the magnitude of their debts. For instance, a decreasing term policy covering a home debt will charge lower premiums as the the home loan is paid off. The insurance company will pay the remaining amount to the bank should death occurs before the loan has been fully paid.
Whole life insurance would be an appropriate option if you want the benefit to be do more than merely pay off debts. Premium payments would be made through your life and you do have options has to how you want to make these payments. For instance you may opt for levelized payments or higher payments that would cease when you attain an age of 60, 65 or 85. Upon your death, the insurance company will issue a payment in the amount you chose to your beneficiaries.
If you are HIV-positive, South Africa is one of only two countries that offer life insurance cover for people with HIV/AIDS. Your premiums may be somewhat higher, and your insurance provider will require you to maintain antiretroviral treatment.
Make sure that you deal with reputable and dependable companies that are known to honor their payout agreements. Most experts recommend checking with more than four companies to find out about the different options and plans in the market.
Bear in mind that a life insurance policy may be the only protection your family has from financial hardship in the event if an unexpected death. The peace of mind coming from the knowledge that your family will be provided for more than offsets any inconvenience you may experience now.
Tom Martens is the syndication coordinator at lifeinsurance-southafrica.co.za. South Arica’s leading Life Insurance portal