Although life cover insurance has been around a while now, there are still people who do not realise the importance of having it. Some will think that because they are currently fit and healthy, they will continue to be this way for the remainder of their lives. Even if this was true there are many aspects of danger in the modern world that could end life prematurely, short of burrowing deep underground there is no sure way of knowing what fate has in store.
The people that bring in the household income need to think about what would happen and how their spouse or children would cope financially if they were without you. It could mean that plans for college or university are no longer an option or that they need to move from the house they currently live in and have debts that add to the stress that grief has brought.
Even those with lower incomes should consider how much lower it would be if theirs was taken from the equation. Although South African state benefits are available they will only cover basic costs which do not include mortgages and things like further education.
Two main coverage types exist within all insuring companies. The first will continue for a lifetime no matter how short or long it may be. Benefits include a set amount being paid despite living costs rising as time goes by. Any problems with health that occur will not have any effect on payments either so financially you always know where you stand, which will mean you can set your budget in advance.
If you ever fall into financial hardship while paying towards a whole life insurance then they provide a way for you to lend some of the money paid in. Because it is interest free it saves money in the long run when you think of how much a loan taken out through a bank or other financial institution would cost in interest alone.
For people who do not earn enough for full long term coverage, short term is also available. It is known as a term insurance because the payments and the cover only last for a term set by both the insurer and the insured. This is usually over ten or twenty years, however once the term is completed you are no longer covered unless you start over again.
The advantage of the lower priced insurance is that they cover can be specified for a set term when their children are too young to fend for themselves or until the payments on a mortgage are complete. The downside is that if they become ill and the insurance has run its term any new agreement could be a lot higher. You can never be sure that the premiums will not rise for the whole period so budgeting in advance is almost impossible.
Unlike in the past insurers will now even cover those with ill health as as well as being ill there is no added stress around loved ones paying for a funeral. Every circumstance is different which is why the premiums can vary. Leading a healthier way of life and cutting out or down on any habits that have been proven to damage health will reduce payments in comparison to those who continue to partake in things that are deemed dangerous.