After taking out life insurance, most make the mistake of treating their policy with an out of sight and out of mind approach. But as we continue the journey of life, circumstances change and if your life policy is not adjusted accordingly, it could result in a situation where your cover is no longer appropriate for your circumstances.
Research shows that around 40% of economically active consumers in South Africa are under-insured. It then becomes critical for everyone to understand the risks associated with not having enough life insurance to financially protect your family in the future.
As you get your financial affairs in order at the beginning of every year, and set time aside to craft your budget, it is advisable to include making sure you have the right life insurance coverage. While it may seem like another dreaded item on your to-do list, the risks of not having appropriate cover far outweigh the time it takes to update the policy.
The onus falls on you as the policy holder to update your life insurance policy. It is advisable to do this on an annual basis and when there are significant changes that occur in your life such as the addition of a new family member, a career switch or home purchase, to name a few.
While you may not have any significant changes to report back on to your insurer at the start of each year, it is recommended to go through your policy to refresh your memory on exactly what is and isn’t covered in your policy. Sometimes you may be under the impression that you are covered for certain things when in fact you aren’t.
It’s important to bear in mind that life insurance premiums – the amount paid by you to the insurer on a monthly basis – are determined by a multitude of factors such as age, occupation and health status. If you have decided to kick the smoking habit, for example, this could impact (potentially reduce) your premium and/or underwriting. On the other hand, if you are underwritten as a non-smoker and happen to pick it up without updating the policy, then this might impact a future claim negatively.
Life insurance may seem unnecessary when we are in our 20s without dependents. But as we grow older, start families, create homes and build careers, we come to realise that life insurance is a vital part of any financial plan.
For more information on a life policy that suits your needs, speak to Standard Bank directly and we will tailor-make a long-term insurance policy for you that gives you peace of mind.
DISCLAIMER: The views and opinions (information) expressed in this article are for information purposes only and do not necessarily reflect the official policy or position of The Standard Bank of South Africa Limited or any of its subsidiaries and holding companies or their subsidiaries and holding companies (Standard Bank Group). The information does not constitute advice and is not to be relied upon as independent professional advice of any kind. The Standard Bank Group makes no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information or as to its being free from errors or omissions. The Standard Bank Group and its employees, agents and representatives accept no liability for any loss, damage or claim arising from the use of any information presented in this article.
Standard Bank Insurance Brokers (Pty) Ltd (“SBIB”) is an authorised financial services provider FSP 224. SBIB is a Group company of The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06), an authorised financial services and registered credit provider (NCRCP15).