Why You Need Life Insurance
If you need a list of reasons to get life insurance, here are a few to get you started. 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.
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.
If you wish to your death benefit to cover more than outstanding debt, consider whole life insurance. With this type of cover, you make premium payments over the course of your life. You may choose to pay level payments or arrange to pay higher premiums at the beginning of the policy which will allow you to stop making the payments at 60, 65 or 85 and retain your coverage. In return for your payments, the insurance company will pay a death benefit in the amount you choose to your beneficiaries upon your death, regardless of how long you held the policy.
South Africa is only one of two countries where life insurance is available for people who have tested positive for HIV or have AIDs. The premiums are slightly more expensive and the insurance companies will need policy holders to continue with anti HIV therapy.
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 content syndication coordinator at lifeinsurance-southafrica.co.za. South Arica’s leading Life Insurance portal
