Life assurance is a financial product that protects your loved ones, giving you and your family peace of mind. Long term assurance covers a fairly diverse range of products.
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Helfin offers long term assurance to cover a variety of needs:
- Basic life assurance to cover debt or to provide to loved ones in the event of death.
- Disability lump-sum cover to protect you in the event of becoming disabled.
- Severe illness (also referred to as critical illness or dread disease) cover to protect oneself from the high expenses incurred from a life changing event.
- Income protection which covers your monthly income in the event of disability or illness.
- Education policies for children to provide for the high costs of education in the event of death of a parent or both parents.
- Business assurance such as buy-and-sell cover for business shareholding agreements, business overheads protection for small businesses to survive if something were to happen to the key individual of the business, and many more specialized types of cover.
Helfin can assist with determining what your needs are and will recommend the relevant product best suited to your needs as we are affiliated with all the major long-term assurance companies in South Africa.
Basic life cover can have a variety of purposes.
- It can provide for loved ones, by covering debt and easing the financial burden from your passing, it can be used as cover on loans, be used for business purposes such as buy-and-sell agreements, etc.
- Life cover is usually taken out whole of life but can also be taken out for a fixed period of years.
- The cost of life cover is affected by age, smoker status, occupation, qualifications and health status.
Disability cover is paid out as a lump-sum to cover debt and any unforeseen circumstances you might have in the event of becoming permanently or temporarily disabled and is usually taken out until retirement age.
- Since there are varying degrees of both permanent and temporary disabilities, one should be aware of what you are covered for under disability and what % pay-out you will receive for a specific disability.
- Functional and physical impairment is a different type of disability cover that pays out a % lump-sum accordingly to the severity of the impairment and is usually included as an add-on to comprehensive disability however it can also be taken out on its own.
- Comprehensive disability covers more disabilities than your ‘basic’ packages and pay-out percentages are usually more, however you also pay a higher monthly premium for the peace-of-mind that you will be covered no matter what.
- Disability can also be taken out as an ancillary (accelerated) benefit on your life cover. (See explanation in Premium Patterns & Terms)
Severe illness cover is the most expensive and complicated cover to obtain and in most cases, is taken out whole of life and is paid-out as a lump-sum.
- Premium rates are affected by age, smoker status, health status & existing medical conditions.
- Severe illness cover can also be taken out as an ancillary benefit on the life insured amount, to keep the premium costs lower, or as a stand-alone benefit.
- Severe illness cover also comes in ‘basic’ and ‘comprehensive’ packages and specific medical illnesses can be insured for even more which can be beneficial if you have a family history of a specific medical illness.
- Whether you have basic or comprehensive severe illness cover, all life companies are required by law to cover the following four main severe illnesses: Heart attack, Stroke, Cancer & Coronary Artery Bypass Graft, as these four usually account for +- 90% of all severe illness claims.
- It is imperative to peruse your policy documentation regarding severe illness to know what you are exactly covered for and what % pay-out is applicable to specific conditions and the severity thereof.
- This type of cover becomes more costly at older ages and should be taken out as early as possible.
Income protection can be taken out to cover for temporary or permanent (or both) disability or illness.
- Premium rates are determined by:
- Cover required
- Waiting period (See explanation in Premium Patterns & Terms)
- In-claim escalation (See explanation in Premium Patterns & Terms)
- Whether cover is for temporary or permanent (or both) loss of income due to a disability or illness.
- Most insurers cover up to a maximum of 75% of your income.
- Cover is taken out until age retirement age.
- CPI in-claims escalation to ensure that your monthly income pay-out increases in line with inflation.
- Sickness benefit is available for professionals as a temporary benefit that will cover your monthly income in the event of illness for up to 24 months.
- Also note that contributions towards income protection are tax-deductible.
- Level or fixed growth: Premium or benefit amount (or both) increase at a fixed rated which may be beneficial in a whole life policy.
- Age-rated growth: Takes age into consideration age and is generally less expensive when the policy is first taken out however the monthly premium is considerably more at a later stage and is mostly used in term policies and business assurance.
- Stepped growth: A combination of fixed and age-rated growth where the premium will increase every few years, usually every five years in most cases.
- No growth: No premium or benefit growth can be chosen however your monthly premium from the start of the policy will be prohibitively more expensive.
- Ancillary (accelerated) benefits: Disability and severe illness benefits can be taken out as accelerated benefits on the total life insured amount.
– For example, should you take out R1million life cover, as well as R1million disability & R1million severe illness cover as ancillary benefits, on the first claim event (death, disability or severe illness) will exhaust the life fund and the policy will thus end. This is a less expensive option than taking out each benefit as a stand-alone (non-accelerated) benefit.
- Loadings & Exclusions: Depending on your health status and whether you have any existing medical conditions, your application for life and severe illness cover could have terms attached to it.
– A loading is when you are a bigger risk to the insurer and therefore will have to pay an increased premium.
– An exclusion is applied for a specified condition and will not pay-out on your policy. Life companies will specify any loadings and exclusions in a counter-offer letter once the application thereof has gone past underwriting stage.
- Waiting period: The amount of time before an income protection policy will start paying out a claim and ranges from 7 days to 12 months. The longer the waiting period, the cheaper the premium.
- In-claim escalation: Once claiming on an income protection policy, the monthly payments you receive can either increase at a fixed % or according to inflation or not increase at all, this will make the premium more costly.
- Smokers pay more for cover.
- Routine blood, cotinine & other medical tests are required and costs will be paid by the insurer. Medicals can be done with your preferred doctor or with the insurer’s travelling nurse at your preferred location.
- Life and severe illness cover is more expensive the older you get, particularly severe illness cover, it is therefore imperative to obtain severe illness cover as early as possible, especially if your family has a history of specific medical conditions, such as heart-attacks, strokes, cancer, etc.
- Depending on your health status, life & severe illness cover could be loaded, meaning that you are higher risk for the life company to cover and will thus have to pay more, or a specific condition could be excluded, meaning that the claim will not be paid out if the conditions of the claim are linked to the exclusion.
- It is imperative that you choose the correct disability cover for your nominated occupation and advise the insurer should you change occupation.