In South Africa, 70% of people have life insurance. This kind of insurance is similar to unnecessary expense. Death of loved ones, huge debts and expenses can provide you stress during the grief period. However, life insurance benefits can give you peace of mind and freedom from stress.
Life insurance policy can be a contract among life insurance firm and the holder of the policy. This promise to pay the amount of cash to the legal heirs or perhaps beneficiary during the time of death of the person being insured.
How does life insurance works and the benefits that you can avail
- Can Protect your Loved Ones
What is life insurance policy? In fact, life insurance gives funds in order to pay off the mortgage payments, debts, living expenses, funeral expenses, taxes, and income loss. Having a life insurance can help your loved ones live and survive when you are gone.
The policy can be bought from the life insurance company that can pay an amount of money at the time of your death. This can provide other financial support for the family who is left behind. In fact, this can be combined with a retirement plan or savings.
- Can Secure Property
The life insurance can cover and provide the tax-free amount of cash that can be utilized to pay death duties and property. Since for most people, their home can be considered as the most valuable asset and with life insurance, their outstanding loan can be paid off.
- Can Pay for the Funeral
In South Africa, the costs of the average funeral are a bit expensive and mostly around R15 000. Luckily, the policy of the life insurance or a burial plan can cover all the expenses so that the family or loved ones need not worry about the expenses during the wake and other things.
Tips for Selecting the Right life Insurance Coverage
- Purchase enough Coverage
To make sure you get the right coverage, lists all your liabilities such as debts, mortgages, taxes, and more. Then include an amount of cash to cover important things like schooling expenses and raising of the children, lump sum for the spouse, and many more.
- Do Not Over Insure
To make sure you do not exceed on the coverage of the insurance, check what covers you so not to waste cash. There are also employee benefit packages like income protection, life insurance, and medical insurance.
- Recheck the Life Insurance
It is very important to review the coverage of your life insurance especially if your family is growing and the size of the mortgage increases. This is to make sure there is enough protection. An annual review or recheck can be done.
According to statistics, 30% of people in South Africa does not have life insurance. Thus causing their families drown in gigantic debts. Is it advisable that you get one so that during the time of your death, these people are protected.
With life insurance benefits, your loved ones are at peace and will not worry much when you are away from them.