Many South Africans are realising the importance of owning a life or funeral insurance policy but very few understand what to look for when selecting cover for themselves or their family. In certain cases, individuals overlook vital elements on their policy, putting themselves at risk when it is time to claim.
“It is very important to ask all the crucial questions before signing an agreement with your chosen insurance provider. Do not have reservations about asking too many questions or pretend to know what you are being offered as this could be a costly mistake when you need to claim,” says Lee Bromfield, CEO of FNB Life
To ensure that you take appropriate cover, consider asking the following important questions:
- What value does this cover give me and my family? Choose insurance for its value, not because it is the cheapest you can find. Even though price or monthly premiums should be one of the considerations, your main objective should be to get the best possible value. Price alone should not influence your decision.
- How much am I covered for? Nowadays insurers predominantly offer a financial benefit (payout) as opposed to the old trend of merely providing a coffin for the burial. Understand exactly how much you are likely to get to minimise the risk of being under insured or over insured.
- What is the claims process and how soon do you pay out? Most funeral insurance providers promise to payout within 48 hours but it is essential to understand the requirements for your claim to be successful. An insurance claim that takes longer than it should, could lead to financial difficulties.
- Will my premiums be fixed or increased annually? Insurance is offered in different forms. Consumers have an option of selecting cover with constant premiums or ones which increase annually. Whichever one you choose, you need to know how much your payout will be.
- How many family members can I cover? This mostly applies to funeral insurance – where you can cover a number of people under one policy. Get clarity on how many people you can cover and what the terms and conditions are.
“You need to remember that the questions you ask before taking up a policy go a long way in helping you get the cover you want. Life or funeral insurance is about securing yourself and your family from financial hardship in the event of losing a family member, take the necessary time to make every decision right,” concludes Bromfield.
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