Ever Thought of Getting a Life Insurance?

Life Insurance

This is a contract between an insurance company and the insured(customer). Life policies can either be for protection against the insured event or can be an investment where the aim is to save and grow your money.

Why do I need life insurance?

• • It can provide financial support in the event of critical illness, disability, or sudden death. Hence protecting the financial interests of your family.
  • It can also act as a long-term investment that helps meet goals such as children’s education, children’s marriage, building a dream home, a relaxed retirement life, or any other goal.

Different types of Life Insurance covers

• • Term Assurance
    This policy offers protection only for a particular period which is agreed upon by the insurance company and insured. It is the simplest and cheapest form of life insurance since it provides life cover only with no investment benefits.
    The insurance company will pay out the full sum assured if the insured passes away within the insurance period. There are no benefits that are payable if the insured is still alive when the policy matures.
  • Endowment
    An endowment policy combines both protection and investment. The insurance company will pay out the full sum assured if the insured passes away within the insurance period. If the insured is still alive when the policy matures, the insurance company will pay out the sum assured and all the bonuses earned in the course of the policy.
  • Whole Life
    A whole life policy offers life-long protection to the insured. The insured select how they would like to pay premiums. It could be throughout your life, you can choose to cease payment at a particular age.
  • Unit Linked / Investment insurance policies
    This policy combines protection and investment. A part of the premium is used to purchase life protection and the rest is used to purchase units in an investment fund managed by the insurance company. Investment returns on the policy are linked to the investment performance of the managed fund.
  • Funeral Insurance cover
    This cover is meant to cater to the funeral expenses of an insured or their loved ones in the event of their demise. The benefits are payable within 48 hours after notification of death.

What do I need to look out for when taking life insurance?

• • The Policy document
  • The policy term or period
  • The amount of premium and the frequency of payments
  • The bonus (if any).
  • Cancellation clauses
  • The cash surrender value (the amount the insurance company will pay you if you cancel your policy after 3 years but before maturity).
  • Policy loan (you can take a loan from the insurance company against your policy after an agreed period).

Can you cancel a life policy?

• • When buying a life insurance policy, you are essentially buying the protection and benefits that come with it.
  • Canceling, therefore, means you forfeit these benefits and protection. Cancelation also means that the premiums already paid may go to waste.
  • If someone asks you to cancel your current policy and then buy another policy, consult your current life insurance company first to avoid losing your benefits.
  • Many times your current insurance company can make the changes you want at a lower cost as opposed to moving to a new company.

What do I do if I need to make changes to my life insurance policy?

• • If circumstances change and it requires an adjustment to the life insurance policy document the insured needs to make a request to the insurance company in writing and they will advise on the next steps required to effect the changes.

What happens if one is unable to keep up with my premium payments?

• • If one is unable to pay premiums within the first two to three years, the policy may lapse.
  • After three years, however, the policy gains value, and as such, the insurance company is able to refund a portion of the paid premium.
  • The insurance company will advise on other options to keep the policy in force e.g. the already paid premium can be utilized to fully pay premiums for a policy of a lower value.

What happens if one dies before the policy matures?

• • In the event of death, the policy benefits are paid to the nominated beneficiary(ies).
  • Some policies have riders that come into play to keep the policy in force until maturity e.g. Education policies pay some benefits upon the demise of the insured but the policy remains in force until maturity to enable the children to complete their education as per the original plan of the insured.

How to make a claim and how long does it takes

• • When the policy matures, the insurance company will contact you to collect your benefits. The insured or beneficiaries can also get in touch with the insurance company if they have not made contact.
  • In the event of death or disability, the insurance company should be notified immediately. The necessary forms should be completed and the person making the claim will be advised on the required documents to facilitate the processing of the claim.
  • Claims are settled WITHIN 30 days of submitting the required documents.