Insurance is a form of protection for things that could go wrong and result in financial loss. When you have insurance, if something unexpected happens that is covered by your insurance policy, you won’t have to pay the full cost of a loss. You enter into a contract with a company and pay them on a monthly basis to have this protection. The monthly payments are called premiums.
Funeral Policy
A funeral policy will help cover the costs of a funeral if you have a death in the family. You make monthly contributions and the money is only paid out on the death of the person noted on the policy. You will need to select the beneficiaries (the people who will get the payout in the event of a policyholder or the insured person dying).
Life Insurance
A life policy pays out for the remaining family members when a policyholder dies. You nominate the beneficiaries and then make monthly contributions. You may be required to complete medical tests and see a doctor before getting life insurance. You need to be honest about any medical conditions you may have.
- It is important to understand your needs or the needs of your family and the type of cover you need.
- Only get a policy from a registered insurance provider who is registered with the Financial Sector Conduct Authority (FSCA).
- These policies are where you can expect the terms and conditions of a policy to apply such as exclusions, fine print, and waiting periods.
- Get advice on the amount of cover that you need.
- Another very important consideration is regarding your beneficiaries make sure you list your beneficiaries clearly and that they are aware of the listing. You will also need to update their details if changes arise.
- When you take out insurance, there are certain questions you are asked or tests you may need to undertake. It is important to be honest and disclose health and lifestyle-related information such as pre-existing health conditions and lifestyle conditions such as smoker or non-smoker conditions. If certain conditions are not disclosed, this may lead to the rejection of claims.
- It is also important to check through the policy documents and terms and conditions of what situations or events will be covered, what situations are excluded, what the waiting periods are, what is the excess and so on. Should anything change in your situation it is important to notify the insurance.
By not understanding terms and conditions it may be difficult when you claim, and some claims might be rejected. Some of the reasons that may lead to claims being rejected or unpaid may include incorrect beneficiaries identified, non-disclosure of medical and lifestyle conditions, fraud, driving under the influence of alcohol, or suicide.
Premiums: this is the amount of money you will pay to the insurance company or bank, monthly in most cases, for your insurance cover/policy.
Waiting period: A waiting period is the amount of time that an insured individual must wait while paying the insurance premiums before some or all of their coverage by an insurance company comes into effect and the insurer can start paying for any claim.
Beneficiaries: These are the people who receive the payout in case of a death of a policyholder.
Excess: The initial amount that has to be paid by the policyholder towards a claim. For example, if your excess is R2 000 and the damage in your possession amounts to R20 000, you will be required to pay R2 000 and the insurance company will pay R18 000.