When should you take out Life Cover?
with Juanita Doolan from Liberty
Most people know what Life Cover is, but not everyone knows about the process of application, how the final amount is determined, or even when they should apply. Juanita Doolan, a registered financial adviser at Liberty, tells us more about this necessary topic.
WHAT IS LIFE COVER?
“Life cover is an insurance product that pays out a lump sum amount to your family and/or other beneficiaries should you pass away.”
HOW IS THE AMOUNT OF MY LIFE COVER DETERMINED?
“A financial advisor will be able to assist you with calculating how much life cover you need. Things that the advisor will take into consideration is how much debt you have accumulated, if you need to provide for education, if you need to provide someone with an income (whatever the reason may be), or whether you want to leave someone a legacy. There are several aspects that need to be considered, but it is not a one-size-fits-all approach to the matter, as each person’s situation is so unique.”
WHAT DOES THE PROCESS FOR APPLYING FOR LIFE COVER LOOK LIKE?
“Once you have determined how much life cover you will need and you are satisfied with the cost (the premium), an application is submitted to the relevant insurance company. An insurer will then determine (based on your health, which is assessed during an underwriting process) how to grant you the cover. If you have any health conditions the insurer may decide to offer the cover to you under certain conditions, which may mean that they can either load your premium or exclude certain conditions. You can then decide whether to accept the proposed cover or to approach another insurer.”
WHAT HAPPENS TO MY COVER IF MY HEALTH STATUS CHANGES?
“If you were in full health when the cover was granted initially, and then develop a condition afterwards, your cover and the conditions to your cover will remain the same. If you wish to take out additional cover after diagnosis, then your new health condition may influence any new cover that is granted. This is a good reason to take out cover while you are still young and healthy.”
WHAT DOES THE CLAIMS PROCESS LOOK LIKE FOR LIFE COVER?
“I always recommend my clients to keep a ‘Life File’ and to tell someone they can trust where this file is kept. If something should happen to you, your beneficiaries and loved ones will know where to find all the relevant documents. You should keep the contact details of your financial advisor in this file, as this person will assist your family and other beneficiaries during this time. To submit a claim, the beneficiaries will be required to submit a death certificate to the relevant insurer, which will then start the claims process. The insurance company usually needs the beneficiaries to complete a claim form and will require some supporting documents from them.”
While it is never too late to take out Life Cover, you can greatly benefit from doing so as early as possible. Call a trusted Liberty financial adviser today to secure your financial future.