April 2 - This is the question that many prospective
life insurance clients in South Africa are asking
themselves, and one which 1Lifedirect CEO, Lenerd
Louw, has an answer for.
'At the very least, the life insurance cover you
take must provide enough to replace the income you
are now contributing to the family, as well as pay
for any outstanding debts you might have so that you
don’t leave your dependants with that liability,' he
says.
Louw acknowledges that life insurance coverage often
varies from person to person as it is influenced by
so many factors. For instance age, whether you're
single or married, whether you have children and how
many, any outstanding debts you may have, how much
you earn and so forth.
'The rule of thumb is to take out a life insurance
policy between 6 and 20 times your annual salary.
This insurance policy should also take into account
any outstanding debts, home loans and vehicle
finance etc that you may have,' continues Louw.
Louw advises people contemplating taking out life
insurance to take inflation into account when
determining the amount of coverage required, and
that it's also
important to consider that the cost of living goes
up every year.
'Although R1-million might be enough to support your
family now, it might not be enough in 10 or 15 years
time,' he says. 'It is all too true that having too little life cover is just as bad as
having none at all.
'Failing to take out enough life cover can hinder
your efforts to secure and protect your dependants'
financial future. There is absolutely no point in
taking out a life insurance policy and paying for it
every month if, after you are no longer around,
there is not enough money to pay for your children's
education, the bond on your home or any debt you may
have.'
Louw goes on to explain that the point of life
insurance is to ensure that your family’s future
financial needs are properly provided for and that
they will be able to maintain their current standard
of living should you pass away or are no longer able
to earn an income.
For more information, call 1Lifedirect Insurance now
on 0860 10 53 15.
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