Long Term Insurance
What is Long Term Insurance?
Long Term Insurance is a term for the type of insurance products that are governed by the Long Term Insurance Act, for example:
- Life Cover
- Disability Cover
- Dread Disease Cover
- Funeral Cover
- Credit Life Cover
How much Long Term Insurance do I need?
How much you need of each type of these insurances will depend on a variety of factors. Each client needs to be assessed individually by one of Insurance Busters financial planners in order to assess the risks associated to that specific client. Based on this assessment the financial planner will be able to advice the correct type and level of cover for each client.
What is Life Cover?
Life cover is a long term insurance policy that pays out a cash lump sum to your nominated beneficiary in the event of your death.
If you have a partner or family who depends on your regular income, you need to be sure they would cope financially if you were no longer around. One must remember that your family members would still have to find money to cover the monthly costs of living should you die prematurely.
Life cover is also used to pay off any remaining debt such as a mortgage if you were to pass away.
How much Life Cover do I need?
The amount of life cover that you need depends on a few factors:
- How much debt do you have outstanding (i.e. your mortgage or vehicle debt)?
- How much income do you need to substitute when you aren’t around to provide for your family?
- What are the potential executor and tax costs you will incur if you pass away (i.e. estate duty and CGT)?
All these factors will affect the level of life cover needed so each case needs to be looked at on an individual basis.
Please contact our financial planners who will calculate the correct amount of life cover you need to protect your family.
What is Funeral Cover?
Funeral Cover is a form of insurance that pays out a cash lump sum to cover your funeral expenses when you die.
How much Funeral Cover do I need?
The amount of funeral cover you need depends on the size of funeral you would like to have. This can range from R2 500 to R50 000.
What is Disability Cover?
Disability cover is a long term insurance policy that pays out in the event of you becoming disabled. A disability policy can provide a monthly benefit (income protection) for a certain period of time during your disability or pay out a lump sum (capital disability) in the event of you becoming disabled.
You can use the benefits to continue living your lifestyle or to help pay for unforeseen expenses that arise due to your disability.
How much Disability Cover do I need?
A good starting point is to protect your full annual income through an income protection policy. You should have enough protection to cover your monthly living expenses (rent/mortgage, groceries, utilities, etc.) if you were in a situation where you couldn’t work.
You may also want to consider adding on a level of lump sum disability cover which could cover your outstanding debts if you were to be unable to work.
What is Dread Disease Cover?
Dread disease cover is a long term insurance policy that provides a lump sum pay out in the event of you contracting a dread disease like cancer. It can be used to help fund any additional expenses that arise from contracting the disease (e.g. medical expenses)
This type of cover mustn’t be confused with medical aid. Medical aid covers specific expenses incurred (i.e. hospital expenses) whilst dread disease insurance pays out a lump sum benefit depending on the severity of the illness. The payout has no relation to the expenses you’ve incurred during your illness.
How much Dread Disease Cover do I need?
The ideal amount of dread disease cover will vary from person to person, depending on income, levels of debt, and the other insurance policies that you may have. You may choose to allocate part of your Life Insurance to cover dread diseases (accelerated cover) or take out stand-alone dread disease cover, depending on your situation and affordability.
Your financial advisor will help you analyse the costs you might incur if you contracted a dread disease and will suggest the correct level of cover for you.
What is Credit Life Cover?
Credit Life cover is a form of insurance that protects your outstanding debt and the debt instalments. If you pass away or suffer a permanent disability the policy will pay off your remaining debt to the credit provider concerned. If you are retrenched or become temporarily disabled the policy will pay your debt instalments for a period of six months.
How much Credit Life Cover do I need?
The amount you need is directly proportional to the amount of outstanding debt you have with a particular credit provider.
Please contact our financial advisors to get affordable credit life cover in place.