Looking at the types of insurance products (Part 2)

We previously looked at home insurance, personal valuables insurance, legal insurance and income protection cover here. Now we’ll take a look at types of insurance relating to your health and options like life insurance and funeral cover.

Health insurance

Health insurance is a less expensive alternative to medical aid, but the amount of cover is also reduced. Health insurance is covered by different legislation to medical aids so the prescribed minimum benefits and limits on waiting periods don’t apply. The benefits vary between providers so investigate carefully whether your needs will be properly covered before choosing.

Disability cover

There are two types of disability cover:

  • Lump sum payout if you become permanently disabled to cover outstanding debt and medical expenses
  • Income protection that pays you a monthly salary, similar to income protection cover, for either temporary or permanent disability

Critical illness cover

We all know that medical costs and long hospital stays can become extremely expensive very quickly. Critical illness cover is a lump sum payout to cover medical costs, lifestyle alterations, household expenses, long-term nursing and similar financial needs. The illnesses covered vary between providers, but usually include cancer, stroke and heart attacks.

Funeral cover

Funerals can be very expensive. Funeral cover pays out a lump sum to help the family pay for these costs. Some policies also include the option to add extra benefits like help with family expenses for a period of time and a memorial benefit.

Credit life insurance

Credit life insurance covers your debt if you’re unable to earn an income, such as through retrenchment, illness, disability or death. Credit providers can insist that you take this insurance in order to get the credit you’re applying for, but you are allowed to choose your insurance provider. You may even already have credit life insurance on your credit card because some credit providers include the premiums as part of your monthly fees.

Life insurance

Life insurance helps you to make sure your family will be cared for after you die.  They will receive a lump sum that they can use to pay off debt, cover living expenses or any other necessity. You can choose as many beneficiaries as you like, as well as the percentage of the payout that they will receive.

Life insurance is very personalised, so your premiums are calculated according to your age, gender, health, medical history, whether you’re a smoker and the amount of money that will be paid out.

It may seem morbid to be thinking about your potential disability, death and funeral but these types of insurance are intended to help your loved ones to avoid financial difficulties if you die or you’re unable to work.

With all insurance products, make sure you have done your research carefully and you know exactly what your policy covers and excludes. It’s important to have the most appropriate insurance for your situation and circumstances, so it could be wise to consult a financial advisor before choosing a policy.

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