If Your Wallet Is Skint And Your Health Is Unfavourable, There Is A Life Cover Option For You

We all get up every morning and put in an honest work shift, just so we can take home a pay-cheque at the end of the month. Since the industrial revolution, clocking in and out of our jobs, from Monday to Friday, has been how we afford all the stuff our heart desires.

The only difference is that some people end up taking home more money than others for their daily efforts, right?

If you are in a job that pays well, count yourself fortunate. For those on the lower rungs of the economic ladder, things aren’t so rosy. They have the same needs and desires as everyone else, but price is a constant barrier to overcome in their daily life.

Insurance is no different in this regard.

If you can’t afford a couple of hundred Rand a month for life cover, what options do you really have?

  • You reside yourself to the fact that you can’t afford life cover
  • You could take out a cheaper accidental death cover policy as an alternative

Affordability might not be the only reason why you can’t take out life cover, your health might also count against you.

If you’ve ever applied for life cover before, you know the drill:

  • Before you get quoted a premium, you are asked a series of medical / health questions.
  • Those questions, along with other risk factors like your occupation and income, determine the premium you are offered by the life insurance company.
  • Then you need to go for the dreaded medical examination.

In most cases, the medicals are a set of blood tests (that dreaded needle jab in the arm). If the underwriter is unsure about your health, then they are going to ask you to have a full medical exam completed, and they might even dig into old health records, going back years, if they want to make sure about health issues in your past.

At Stangen though, we’ve kept it simple.  We don’t require intrusive blood tests to check your health.  On most applications we only ask health related questions, and in very few instances require an HIV test (something you should regularly do in any event).

Life insurance companies want to make sure that they understand the risk they are pricing. If a life insurance company is taking on the risk of you passing away, from a pre-existing illness, they want to be sure they are making the right call.

So the person applying for life cover, after answering the medical questions, has three options:

  • Accept the quote for life cover, and go for the HIV test, to make sure they get the full cover available (whether with or without any ‘health loadings’); or
  • Accept the quote for life cover, but don’t go for the HIV test, and then only get accidental cover (but on individual life premium rates); or
  • Decline the life cover offer

People who don’t qualify for life cover, or get health loadings applied, are great candidates for accidental death cover, priced on a group scheme basis.

So, what’s the difference between traditional life cover and accidental death cover priced on a group scheme basis?

As the name suggest, accidental death cover only pays out when your death is as a result of an accident (like a car wreck). Traditional life cover also covers death as a result of natural causes (like a heart attack).

At Stangen, our personal accident cover policy is priced on a group scheme basis, meaning you could get cover (albeit at lower sums assured), or cover at a lower premium rate than if you were to pay a higher premium on traditional life cover due to poor health.

The rule of thumb is the following:

If you can afford a traditional life cover policy and you qualify because you are in good health, you should always opt for that option. It’s the sensible thing to do.

If price is a hindrance, or you don’t qualify for life cover because of your health, then an accidental death policy certainly makes sense. Having some life cover in place is certainly better than having no cover in place.

Let’s look at the pricing of our accidental death and disability cover:

First off, you can choose from 3 different levels of cover:

  • R50,000
  • R75,000
  • R100,000

Over and above insuring yourself, the following additional family members can be added:

  • Your spouse / partner
  • Your children
  • Extended family (parents, parents-in-law, adult children)

Our Accidental death and disability pricing table:

Benefit amount R50,000 R75,000 R100,000
Main member R35 pm R44 pm R59 pm
Main member & spouse R47 pm R61 pm R79 pm
Main member & children R43 pm R56 pm R72 pm
Family bundle R55 pm R69 pm R89 pm
Additional extended family R35 pm R44 pm R59 pm
  • No waiting periods apply, so your claim will be entertained after your first premium has been collected.
  • No medical examinations apply
  • The policy can be taken out over the phone

If a life cover premium of R200 a month is beyond your financial means, would it not be reasonable and responsible to take out a policy for R59 a month and get R100,000 accidental death cover in place?

Need a quote. Click here.

Until next time.
The Wise About Life team

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