Life insurance, who needs it right? Well, if you're young and single, just finished school or university and entering the job market then no, you probably don't need it. But, if you're married, or have a family, then life insurance is a handy thing to have. It provides your loved ones with money or a regular income, when you can't. And by can't we mean when you are no longer in the land of the living.
1. Don't leave your family high and dry
There are all sorts of life insurance plans that you can take out. Some will pay out a "lump sum" of money when you (or the person insured) die. Other plans will provide a regular income for your family. Yet still more will pay back your premiums if you haven't claimed in a certain number of years.
Choosing one is down to personal preference. However, it would be prudent to consider where you're at in life. What does your income currently cover (bond, groceries, utilities, education plans for your kids)? Consider how your spouse, partner or family will be impacted by the loss of that income.
2. Avoid prolonging the process – funeral plans pay for funerals
A funeral plan is ideal for exactly that – a funeral. The amount paid out should be enough to cover funeral costs. It won't be enough to cover your family's needs for any length of time. Most financial services companies require you to go for a medical or answer medically-related questions when applying for life insurance. Not so with a funeral plan. The requirements are far less stringent.
Let's go back to the young and single, just-finished-school-or-university example. You may take out a funeral plan on behalf of your parents or siblings. The premium is affordable and the payout fairly fast (within 48 of submitting a properly documented claim).
3. Dodge the debt
Life insurance policies take time to pay out – up to a few months in some instances. If your family has access to cash to cover your funeral then you probably don't need an additional plan. If they don't, or you don't want to burden then with the cost, then a funeral plan may be something you would like to consider. Funeral plans pay out much faster than life insurance. They'll take care of the immediate costs while the estate is being wound up.
Did you know?
Did you know that even if an individual chooses to be cremated the family still has to purchase a coffin? Prices can start from R8 000 and more!