Life Insurance in South Africa

picture of a family having funWhat life insurance can you expect to find in South Africa? There are dozens of insurance companies offering life insurance in South Africa. Some are established and well-known; others are fairly new to the life insurance game. The amount of insurance companies in South Africa offering life insurance is good news for us in that we are bound to get a good, competitive deal on life insurance if we do our homework. The downside is of course that things can get a bit overwhelming and confusing. This is without starting to think about all of the different policies on the market!
Types of life insurance on offer in South Africa:

Life insurance policies

Life insurance in South Africa can roughly be divided into two broad groups: term life insurance, where you are only insured for a specific period of time (normally no more than 25 years) and whole or permanent life insurance which insures you for your entire life. Within whole life insurance there is also the option of taking it even further and turning it into universal life insurance. The main difference between universal life insurance and whole life insurance is that universal life insurance gives you the option of increasing your premium and payout over time and they can also be used solely as an investment account. You keep paying premiums until the amount invested equals the amount you would get paid you stop paying your monthly premiums.

HIV Life Insurance

Contrary to what most people think, if you are HIV positive you can still take out life insurance in South Africa. The only difference is that you might have to pay higher premiums, but then the same thing goes for anyone with diabetes, high blood pressure or high cholesterol. Life insurance companies might insist that you follow certain regulations, like sticking to a certain treatment plan and like any other life insurance policy, the healthier you are, the lower your insurance premiums will be. HIV life insurance covers you like a normal life insurance policy would but includes HIV related causes (excluding suicide and self-injury)

Credit Life Insurance

Credit life insurance in South Africa ensures that your outstanding debts are settled should you die. Many lenders will only agree to loan you money if you have either life insurance or credit life insurance. Charming right? ‘We will lend you the money you need to buy a house if you can guarantee that when you die we will still get our money’. Thanks to the National Credit Act banks can’t force you to take out their insurance as a precondition for lending you money, so be careful before agreeing to anything.

There are so many different types of life insurance in South Africa that you can choose from that it’s important to go and speak to a financial advisor before taking out life insurance. He or she will be able to give you advice about what type of policy is best suited to you and where to get the best deal so that you don’t end up wasting money by going for something that looks inexpensive but doesn’t meet your needs.

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