The main advantage of having life insurance is that your family is protected financially when you’re not around. For example, if you’re in debt or have a bond in your name, having life cover means that those debts will be covered should you pass away.
While the choice of life insurance products on the market may seem overwhelming, selecting the right policy for you is fairly straightforward once you know the differences between them. Several different life cover products are available in South Africa, which are outlined below. Alternatively, we specialise in providing life insurance quotes that suit individual needs – get a life insurance quote online now.
1. Term life cover
- What is it: Also known as credit life cover, this type of life insurance is ideal if you only want life cover for a certain period, such as while paying off the bond on your house. When the agreed cover period has passed, the cover expires.
- Advantages: It’s relatively cheap.
- Disadvantages: It doesn’t have an investment cash value – in other words, the money you pay each month towards the policy isn’t invested anywhere.
2. Whole life cover
- What it is: This type of life insurance cover expires either when you pass away or when you surrender the policy.
- Advantages: Your premium is invested so that your money grows plus you can borrow against it as soon as your policy has a cash value. Whole Life Cover also generally insures you for a longer period than Term Life Cover does, which is an advantage if you’re relatively young.
- Disadvantages: It’s more expensive than Term Life Cover.
3. Universal life cover
- What it is: This kind of life insurance has an investment component included, so you can save while at the same time covering yourself financially if you pass away. How much is paid out depends on the performance of the investment.
- Advantages: There’s the potential for rapid growth in your portfolio where you can save a much larger amount of money than if you simply kept it in the bank.
- Disadvantages: It’s more expensive than most other types of life cover. In addition, the investment component of this life insurance is riskier, so the growth rate of your portfolio is not guaranteed.
Hollard is one of the leading insurance providers in South Africa. Read more about Hollard’s life insurance products to suit your individual needs, or get a customised life insurance quote online.
The Hollard Insurance Company. Ltd (Reg No 1952/003004/06) is an authorised Financial Services Provider.
