5 Things you should know about life insurance

Life insurance is an integral part of financial planning, and it’s intended to protect your family financially if something had to happen to you. If you’ve taken out a policy, or are thinking about it, here are a few things to bear in mind.

1 You should review your policy from time to time

Have your circumstances changed since you first took out life cover? Perhaps you’ve got married, had children or have relatives who are now dependent on you. Or maybe your partner has opted to become a stay-at-home parent and you’re now the sole breadwinner. If so, what worked for you before may not be sufficient now, so review your insurance policy from time to time to ensure that it covers your needs. This would also be a good moment to check that your list of beneficiaries is up to date.

2 It’s a good idea to keep your insurer up to speed

While you’re at it, think about whether you’ve made any health or lifestyle changes since you got life insurance. Have you finally kicked your smoking habit (or started smoking), become an adrenaline junkie and taken up an extreme sport, or started travelling to high-risk areas for work? Let your insurance company know, as they may need to adjust your premiums accordingly. And if you don’t advise them, it could affect future claims.

3 Honesty is always the best policy

When you apply for life insurance, you’ll be asked about your health, lifestyle, medical history and so on. It’s essential that you’re honest and upfront when answering these questions, and that you don’t withhold relevant information, so that the insurance company can accurately determine the cover that you qualify for. If you lie at any point in your application, this could have an impact on future claims.

4 Your age can affect your premiums

Insurance companies take a number of factors into account when calculating your insurance premiums, and two of them are your age and your health. If you take out life cover when you’re young and healthy, it’s likely that your premiums will be lower than if you take out cover later in life. And they’re likely to remain that way (aside from annual increases), unless you make significant lifestyle changes like becoming a smoker or taking up a risky sport.

5 Even stay-at-home parents may need life insurance

If you’ve opted to stay home and look after the kids, you might want to think about taking out life insurance, even if you aren’t bringing home a pay cheque each month. Consider your day-to-day activities: looking after your home, grocery shopping and cooking, taking care of the kids, getting them to school and back. The list goes on… Then think about how much it would cost to pay someone to do all of that if something had to happen to you. If your partner would struggle financially, it may be worth taking out life cover for both of you.

If you’d like to find out about Life Cover from Standard Bank’s direct life insurance services, get a quote or request that a customer service agent call you back.

Sources
consumerist.com
forbes.com

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