2021 is already into full swing and if last year taught us anything, it’s that, what we hold very dear to us, can be taken away in an instant. We need to put our money matters front and centre this year, considering what a terrible year 2020 had been for so many of us.
While our insurance policies aren’t always something we take the time to look at, there’s no time to waste and reviewing them as soon as possible is really important.
Let us assist you when it comes to reviewing your life insurance policy and point out what you should be double checking. A half hour spent on this will be time well spent, and then you can file your policy document away on your PC and forget about it until next year (unless other major circumstances change).
Here are the most important things to check:
1. Are your nominated beneficiaries correct?
Firstly, make sure that you are happy with who you have nominated as a beneficiary – things might have changed since you first took out your policy – maybe you have gotten divorced, remarried etc.
We must mention that if you don’t nominate a beneficiary on your life insurance policy, the proceeds of it will go into your Estate. The problem then is that it will be stuck there until your Estate gets wound up. Winding up an Estate can take up to two years or more to do. The second problem is that the Executor – the person who divides everything up, according to your Will – is entitled to a fee too.
Another problem that could arise is if you have nominated minors as beneficiaries. There is no law against it, but it does mean your life insurance pay-out will be kept by the Master of the High Court in their Guardian’s fund until your kids turn 18. It would be a far better idea to specify a Testamentary Trust in your Will and have the proceeds of your life cover policy pay out into that – the funds can then be used to take care of your kids until they turn 18 or 21.
2. Have you changed careers?
Life moves fast nowadays and on average people will have as many as 10 different jobs in a working career (one new job every 4 or 5 years on average). That is a lot of moving around, wouldn’t you agree? Making sure your life insurer is aware of any serious risks you face in your job is part and parcel of your role as the policyholder. If you are mostly doing work in an office, then its’ no biggie if you leave your current company and work for another company and do the same thing.
But if you decided to give up your day job to train lions in a circus, well then that puts you at far greater risk than a desk jockey in Sandton and your insurer needs to know this so they can price your cover accordingly.
Do you have enough cover in place?
Did you take out your policy many years ago? Have you accrued debt since then? Have you bought a home or a car? Do you have enough life cover to pay off your debt or will the bank come knocking on your family’s door after you pass away? Have you gotten married and had kids since taking out life cover? Will there be a sufficient life insurance pay out to your family, so that they can get back on their feet again and replace your salary, if you pass away?
This can get complicated so our calculator can help you check whether you need more life insurance.
Remember to give us a call if you want to review your situation on 010 020 7600 or get in touch via WhatsApp on 010 020 7600.
Are you only insured for life cover?
There are many other products you can add onto your life insurance policy. For instance, what if you are involved in an accident and left unable to work again? How would your family replace the income you aren’t able to now earn? The solution is disability insurance.
Or what if you end up only needing 8 months off work because of that accident? How would you cover the 8 months of not being able to earn an income? The solution is income protection cover.
And what about insurance which pays out to you if you are diagnosed with cancer, suffer a heart attack or have a stroke? We can help with this too in the form of Critical Illness Cover.
And let’s not forget funeral cover. Will the R20 000 funeral cover you have, be enough to pay for a decent funeral?
Make sure you check out all our other product options. The links are below:
Until next week.
The Wise About Life Team
