Why insurance is so important for the future
Insurance is an investment in yourself, your family and their future. Like it or not, life cover is a necessity for the time when you are no longer around for them.
In fact, see it as the best investment you can possibly make. Ensure the well-being of your children and their education with life cover.
Why Insurance is an Investment – Short term and Long term
Cover provides financial security in times of unexpected illness. Also a death in the family need not set you back for the cost of a funeral.
It can guarantee a cash payment to safeguard the family in times of unemployment.
Cover can provide equity when it becomes necessary to raise a loan plus payment in the case of an accident.
Who pays when your home or businesses gets burgled? Life cover pays replacement costs for damages done. In short, insurance buys peace of mind.
Insurance for Your family in Times of Ill health
No-one plans to be ill, but for most people is an unfortunate fact of life.
There are basically two types of health cover – Hospital plans and Gap cover.
Hospital plans pay out a daily cash amount to cover non-medical bills. This eases the stress of paying bills when in hospital. Use the money as you wish. Anyone can buy a hospital plan. This is cover that pays out for costs as a result of a hospital stay.
Gap cover is only for members of a medical aid plan. This cover pays the difference between your medical aid rate and the specialists rate. Medical aid schemes work according to a rate structure that is often up to five times less than the amounts charged by doctors. This policy is not a substitute for medical scheme membership.
Funeral cover Can save You an Enormous cash Outlay on the Day
This form of insurance has seen a surge in popularity over recent years, as funerals have become more costly.
It is no wonder that more and more people are taking out funeral cover when a regular cemetery burial costs in excess of R44 000 and the cost of a cremation can set you back at least R8 000.
Add to that all the other fees involved with a funeral – undertakers, flowers, catering – and the costs grow out of hand. Today we see both print and TV funeral cover ads, and, with offers from only R99 a month, it is easy to understand why this product is so popular.
An insurance Policy gives you Equity
Whole life insurance policies can be used as equity to raise cash loans in times of need. This does not apply to term life policies – a product that is offered at a lower premium for a set period of time. Annuity policies are another example of insurance that can be used as equity.
The benefit of Life Insurance in Times of Death
Life insurance is a guaranteed cash payment to beneficiaries. It is usually paid out within days of the death of the life insured and allows the families of the deceased to continue with their lives, free of financial stress.
Life cover is also an investment in that it can be used as equity to raise a cash loan and provide financial care for your family. The policy also has a cash-out value, but this will be well below the face value of the policy if maintained until the death of the life insured.
There are exclusions, such as suicide, in life policies. The contract should be carefully examined before you sign.
Accident cover Insurance
Usually, this form of insurance is taken out on vehicles. Although there are an increasing number of people who do not insure their vehicles, this should be regarded as a “Must Have” form of insurance.
Not only will it cover the cost of damage to the owner’s vehicle in the event of an accident, it also provides cover for third party claims.
Assess you Risk insurance
Although uncommon, homes and businesses do burn down and without cover, it would be impossible for most people to cover the cost of replacement. Far more common is the risk of burglary, particularly in South Africa with its rising crime rate.
Coming home to an empty house, or to find expensive items missing, can be a huge setback.
Always check Policy clauses
Insurance can be complicated, so make sure you fully understand the product and all the terms and conditions. Be fully aware of what is and is not covered by the policy. Your attention will pay off when the time arises to lodge a claim.
Buying insurance Today could Not be Easier
South African insurance providers have made life easy for future clients. Searching the web makes a simple task of product and pricing comparison. Clients are usually given two options: Filling out an application form for more details or requesting a call back from a consultant.
It is vital to shop around before making a final decision. The product must suit your personal needs and be affordable. If in doubt, contact a broker for professional advice and guidance.
And in Conclusion
In a nutshell, insurance can be tricky. After all, it’s not like buying groceries, a car or a home. Those are tangible products. Insurance, on the other hand, is more like buying a promise.
But it is a promise that pays out when disaster strikes.