Life Insurance is a promise to pay a cash lump sum to a person’s family if they die, in return for a regular fee called a premium. The lump sum will be paid to whoever is nominated as the beneficiary, and they can use the cash to settle any debts and pay for things your monthly income used to cover, such as rent, school fees and food.
How is life insurance different to funeral insurance?
They are similar. Funeral plans are life insurance designed to cover the costs of a funeral. Life insurance typically offers higher cover, at a lower cost, and is mainly aimed at taking care of your family after you’re gone. However standard life cover might not pay out in time to cover the costs of a funeral, which is where Funeral plans come in. While funeral plans are certainly important, you should also think about what will happen to your family after your funeral.
Why don’t more people have life insurance?
Most people don’t like to think about dying or being injured, and don’t think it would ever happen to them. For many of us, it’s difficult to make ends meet every month even without this additional cost. Life insurance protects your dependents in the event of your untimely death or disability. Simply offers you protection, quickly, simply and affordably.
The amount of cover you select (up to the maximum of R2 million for Family Cover, R200k for Domestic Cover, and R2 million for Group Cover) will be paid as a lump sum to your beneficiaries when you die.
They will also receive an additional R500 cash per month for 6 months to help cover the cost of groceries.
If you are diagnosed with a terminal illness and are expected to die within 12 months, you can choose to have up to 100% of your lump sum paid in advance to you, or your beneficiary. If you opt for a 100% pay out, your policy will be terminated, even if you recover from your illness.