What you should know about life insurance
186 days ago
A life insurance policy is one of more tricky financial products out there to get to grips with.
In conversation with certified financial planner Paul Roelofse, Phemelo asks him to start with a reminder of what life insurance is.
He says it's important that one understands very clearly all the terms and conditions that come with buying this kind of policy.
Essentially... it's providing a capital amount of money for you should you have what we call a life-changing event.Paul Roelofse, Certified financial planner
Normally it points to things like death, disability and having a traumatic dreaded disease of some sort of well.Paul Roelofse, Certified financial planner
If you don't have the capital should you have one of those things, then obviously you're going to be financially destitute.Paul Roelofse, Certified financial planner
Roelofse says life insurance places you in a risk pool where, by putting away a small amount every month, you are able to claim a large amount if circumstances require.
It also helps a nominated beneficiary in the event of death as the pay-out can be claimed outside of the deceased's estate with no long delays.
But how much cover is sufficient?
Roelofse says it depends on your life circumstances, for example how old your children are, and whether you are paying off a bond or a car.
You also need to make sure that once your debts are paid in the event of your death, there is enough money left over for your dependants to maintain the lifestyle they're accustomed to.
Essentially you want to make sure your family's got enough cover to keep going at least until they're on their own feet and they can sustain themselves.Paul Roelofse, Certified financial planner
For more advice on taking out life insurance, listen below:
This article first appeared on 702 : What you should know about life insurance