The Six Most Frequently Asked Questions About Life Cover

1. Does everyone pay the same premium for Life cover?
No. There are several factors that go into determining the premium that should be paid to secure the benefit the policyholder desires. These include age. The younger you are the less you are likely to pay. Statistically, you have more years to go to reach average life expectancy.

Lifestyle also plays a part in determining a premium. Being a smoker raises the premium. Your lifestyle can affect your overall health. Many insurers insist on a medical examination and blood tests prior to offering you a policy.

The results help them gauge how much risk the company faces if it insures you. Be upfront about your smoker status and health, including family health history. If you omit something, it can be used as grounds to not pay out upon your death.

2. How long does it take for the payment to be made after death?

While funeral cover pays out immediately, life cover works differently. The insurer must do their due diligence before paying out. This is because the sums of money at stake are much larger.

The family of the deceased will be required to submit several documents to support the claim. The first of these is the death certificate. These are some of the other documents that may be required:

  • A doctor’s report on a natural death.
  • An autopsy report on an unnatural death.
  • Police documents in the event of circumstances such as murder.
  • Accident reports from the authorities for accidental death.

After satisfying themselves that all conditions of the policy have been adhered to, the payment is made. This can take a couple of months. It’s advisable to maintain continuous contact with the insurer to find out what you can do to help the process along.

3. Does a Life cover policy include pre-existing conditions?

Most policies do not cover pre-existing conditions. There are some companies that specialize in covering people with pre-existing conditions such as HIV/AIDS and diabetes. Be open and upfront about pre-existing conditions.

If you die as a result of an undisclosed pre-existing condition, no payout will be made. All premiums paid will have been in vain. Make sure you understand what will and won’t be covered. Read the fine print and ask questions before you sign on the dotted line.

4. Should I use a financial advisor or broker for Life cover?

It is recommended that you consult someone in the insurance field before making any decisions. The salespeople who cold-call you are not specialists. Their job is to sell you the policy. They do not know all the ins and outs about the product. A broker is an expert in the field of life cover.

They can assess what your needs are and present you with product options to suit you. The broker can answer any questions you might have and put your mind at ease before you commit.

5. Are there waiting periods on Life cover policies?

Yes. The insurance provider may impose a waiting period before coverage begins. On average, it is six months. This means that you must pay six premiums on the understanding that you’re not covered. After the waiting period is over, you are covered.

In terms of the waiting period, it is important to keep your premiums up to date. If you miss just one, the waiting period may kick in again. This means that for the next 6 months after the next payment is made, you’re not covered. If you’re having problems paying the premiums, contact the insurer to establish what your options are.

6. Does a Life cover policy have a cash surrender value?

No. You cannot cash a life cover policy in if you decide to cancel it. However, several insurers offer cash-back rewards. You receive a pay-back of a certain number of after you have paid a stipulated number of premiums.

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