3 Life Insurance Products You Probably Didn’t Know About

Take a minute and think about the role your mother, grandmother, sister or aunt has played in your life! Can you imagine how your life would have turned out without them?

Now, what role are you playing in your family? Perhaps you’re a stay-at-home mom, a freelancer or have a career with one of South Africa’s top companies. One thing is true – you play a significant role in the family. 

Death is tragic and can unfortunately occur unexpectedly. This is a good reason to have life cover. Think about the following questions for a moment.

If you die, will your family and loved ones survive financially without you? Will your children still be able to afford to attend the universities of their choice?

If the answer to either of those questions is a “No”, you have every reason to consider taking out life insurance from First for Women. 

In this article, you’ll learn about three life insurance products that can help protect your family and loved ones financially in case things change, you become disabled or sadly suffer from illness.

 Life cover: a necessity for the modern woman 

Whatever your role is, you’ll be aware of the unpredictable nature of life and by seeking a life policy you’re wise. If you want to protect your dependents financially even after your passing, read on.

Taking out a life insurance policy is a simple strategy to ensure your family's lifestyle can continue from a financial perspective. Life cover is an agreement between you and an insurance company or bank whereby you pay a monthly premium. If anything were to happen or you which is covered in your life cover insurance, then the provider will pay out a lump sum to your beneficiaries. 

Your dependents can use this money to cover financial obligations they otherwise could not afford. A portion of this lump sum could be used to prepare a respectable funeral for you. The remaining money may be used to cover expenses, such as paying off your bond or vehicle loan or ensuring your children’s education.

The size of the life cover varies based on your needs. For example, if you contribute R5,000 a month to your family, and you want them to receive the same for five years after your death, you’ll need a minimum cover of R200,000. Adding R50,000 for funeral expenses means you’ll need to increase your life cover to R250,000.

Do you know about these three life insurance products?

 Death is not the only tragic thing that can happen to a woman; there are other bad events that unfortunately can also happen. The sad thing is that when such events occur, the financial future of your dependents may be at risk. 

Three life insurance products can protect them financially in case you are not able to provide for them anymore. Read on to learn what those life insurance products are and what they cover.

1.  Dread disease cover

In South Africa, heart attacks, cancer, coronary bypass surgery and strokes make up between 70% and 90% of dread disease claims. Dread disease cover is insurance that covers the costs associated with treating these unfortunate illnesses. 

The critical illnesses covered will depend on your policy and may include dread diseases such as kidney failure, respiratory failure, cancer, chronic liver failure and full-blown AIDS. Cancers and tumours make up about 30% of dread disease claims. [1]

According to the U.S. National Kidney Foundation, women are more likely to suffer from kidney disease than men. What’s concerning is that two in five adults could be suffering from kidney disease and not even know about it! [2]

A 2020 research study published in Circulation, the journal of the American Heart Association, found that women are 20% more likely to develop heart failure or die within five years due to chronic heart attack when compared to men. [3]

The above factors make it necessary for women to consider taking out dread disease cover. If the policyholder is diagnosed with a critical illness, they receive a one-off, tax-free lump sum from their insurer. 

In some cases, the insurer may pay out a percentage of the critical illness cover, depending on the severity of the illness. For example, if you are found to have stage 1 cancer, your insurer may only payout 25% of your claim, compared to a larger percentage if you’re unfortunately in the later stages of the tragic illness. 

2. Disablement cover

Disablement cover is also called disability insurance. It’s a cover that provides an income if you can’t work anymore due to an injury or illness. It will provide you with a tax-free income that’s needed to cover expenses such as altering your home or vehicle to cope with your condition.

Disability cover comes in two types: the lump-sum benefit or the monthly benefit cover. In the lump-sum benefit option, your insurer pays out in full if you become permanently disabled. The monthly disability cover, however, pays out income each month, making it ideal for self-employed women. This type of disablement cover also covers temporary disabilities.

Your premium depends on your age, health status, whether you smoke or not, gender and premium pattern.

Your disablement cover does not cover all disabilities. For example, it won’t cover you if you are disabled due to taking part in a war, terrorism or civil commotion. Other events that can result in disablement that are not covered include the following:

• Taking part in a dangerous sport

• Ignoring or not following reasonable medical advice

• Abusing drugs or alcohol 

3. Pure life cover

As a woman, you have numerous responsibilities, and no doubt, many people depend on you. It can be hard to think about how those people would survive if you are sadly no longer around.

An insurance policy that helps protect your family and loved ones financially in case you die is called pure life cover or pure life insurance policy. It gives you and your family peace of mind, knowing that they will be taken care of financially upon an untimely passing. 

Most pure life insurances cover for accidental death immediately. Death from more complex reasons such as suicide and natural causes can be subject to waiting periods.

When you enter into a pure life cover agreement with an insurer, you agree to pay a premium in exchange for a certain amount of cover. Often you are required to pay this premium monthly. In the event of your death, your insurer pays out a lump sum to your beneficiaries and dependents.

The insurer does not dictate how the lump sum payout should be used. For this reason, it can be used in many different ways, e.g. to help in making funeral arrangements or paying debt or covering the education fees of your dependents.

Your insurer calculates your life cover premium based on your age, occupation, health, the sum insured and other factors, such as whether you smoke or not. The amount of life cover varies from person to person, but it should take into account affordability, your income and the future income needs of your dependents. 

Why South African women need life insurance

Imagine the amount of work that you do for your family: working full time, cleaning the home, driving friends and family around, financial planning and shopping for nutritious groceries. Whatever you’re doing has a cost. Who would do these things in the case of your unfortunate passing, disablement, or suffering from an unexpected critical illness?

Women of all ages around the world face the real risk of breast cancer. Any woman can be diagnosed with breast cancer – and you want to be ready to deal with it and its consequences if it happens to you. You want your family to be taken care of financially while fighting this critical illness. Someone must take over, even if it means hiring a helper, and that costs money. In your absence, your family might not be able to afford such assistance. That’s why having life insurance can be a life-saver for you and your family.

Get a life insurance quote from First for Women

First for Women knows that researching life insurance is not easy. Few women want to talk about the possibility of death. However, death is sure to come at some stage. The best thing you can do is to prepare for it so that your loved ones remain protected financially. Getting life insurance from First for Women begins by obtaining a life insurance quote.

Sources:

[1] Statistics on Dread Disease claims

[2] Statistics from National Kidney Foundation

[3] Statistics from Circulation Journal