Who needs life cover?

Who needs life cover
Life cover South Africa

If you have dependents, you should have some form of life cover in place to ensure they’ll be able to cope if you’re no longer there to take care of them.

Your dependents can include your spouse, children, and other family members.

Your life cover will see that a payout is made to your beneficiaries which will help them cover any large debts as well as living expenses after you’re gone. Life cover offers a number of benefits in addition to this payout such as a funeral, disability, and critical illness cover.

Life cover can also be used as a form of security for large credit such as a home loan or vehicle finance. In fact, some credit providers will require that you take out life insurance to qualify for credit.

In addition to the benefits life cover has for your dependents, it will give you peace of mind knowing that the people that you love and care about most will be properly taken care of if you’re no longer around.

Do young people need life cover?

One of the biggest misconceptions about life insurance is that it’s for older people but that's not at all the case. In fact, younger individuals whether from a single or dual-income household who have just started a family, and therefore have young dependents need it just as much if not more.

In addition, when you’re younger and perhaps can go through the underwriting process with ease, the cover will certainly be more affordable. In addition, you’ll be able to make use of your cover for things such as getting a bond or a car loan.

How does life cover work?

Life cover in its simplest form is an insurance policy that pays out a set amount in the event of your death or, in the case of dread disease cover if you suffer from a critical illness and in some cases if you experience a loss of income. Your beneficiaries will be able to make use of this money to pay large debts such as a home loan and cover their living and educational expenses as needed.

You’ll pay a monthly premium which will be based on the level of cover and the plan that you select or that you’re offered after the process of underwriting. Those with higher risk profiles will generally have higher premiums for obvious reasons. If you fail to pay your premiums your cover will be lost.

There are many life insurance providers in South Africa and the policy that you take out should take many personal and financial factors into account and provide you with the right amount of coverage and additional cover.

Types of life cover

While some policies will pay out only in the event of your death, there are many policies that include disability and dread disease cover, which will be paid out to you rather than your beneficiaries.

Another important distinction is permanent versus term insurance. Term insurance covers you for a specified term called a contract period only.

There are also a large number of additional variations and add-ons that you can opt in or opt-out of that will tailor your life cover to the specific needs of your family. An example is income protection can offer you a percentage of your salary thus further safeguarding your financial security.

Factors that will affect your premiums

  • Your age
  • The amount of coverage that you require, the higher the amount the larger your premiums will be
  • Your budget
  • Your occupation and level of education are both well-known factors that influence your life expectancy
  • Your gender because women tend to live longer than men on average, this is taken into account
  • Your health

How much life cover to get?

The amount of coverage that you need depends on a number of factors including how much you’re currently earning, your current debts, and the needs of your beneficiaries. These needs will include housing, utilities, transport, food, and school fees.

Some insurance providers have a simple and easy-to-use life cover calculator which will help you get a good idea of how much coverage is right for you.

It’s best that you speak to a financial adviser who is experienced in the field of life insurance and who can properly advise you on the right coverage amount. This will take your current financial capabilities into account as well as the needs of your beneficiaries in the event that you pass away.

The best life cover in South Africa

South Africans are in no way short on options when it comes to life cover. There are many insurers and they all have a handful of plans from those tailored to your stage of life to plans that offer cashbacks – there’s something for everyone and no single policy can be labeled “the best”.

As a general rule, you must ensure that you’re not underinsured and that you take into account both the immediate and long-term needs of your family. Further, a good policy should be updated as time passes to account for various changes such as your income, reduced debts, a changing family, and inflation.

Who offers life cover in South Africa?

While there are a number of insurance providers that deal specifically with life insurance, many large banks like FNB offer a range of life cover plans to customers. You may also find that companies which you would think deal with, for instance, medical aid, may in fact also offer a range of life insurance policies too.

What to do before you get life cover

The first step is deciding whether you actually need life cover. While it’s tempting to say that everyone with at least one dependent should have life cover, there are some factors that may in fact make it unnecessary for you to have life cover.

Once you’ve made the decision you should then calculate how much cover you need as discussed above. You should also take note of additional features you may desire such as regular cashback or funeral cover. This will make it easier to search for a plan later.

You can now go out and search for your ideal plan by approaching insurers, making use of the services of a financial planner, and even using insurance quotes and comparison services.

Popular & reliable companies offering Life insurance

  1. All Life Life insurance

    All Life

    • Fast insurance quotes
    • Life insurance up to R1 million
    • Cover for HIV positive clients
  2. Metropolitan Life insurance


    • Easy online life cover
    • Get up to R1 million cover
    • No medicals required
  3. Hollard Life insurance


    • Up to R1.2m life cover
    • Quick Life insurance quote
    • Easy insurance application
  4. Hippo Life insurance


    • Compare Life Insurance
    • Quick and easy online claims
    • Life cover up to R10 million