Life insurance cover up to R10 million.

Life Insurances And Long Term Insurance Investigated

It is mind boggling to hear how many people are still uninformed when it comes to insurance. Sure, with the different types of insurance, ranging from life insurances to car, house, medical and commercial insurances, the topic might be a bit overwhelming, but it is every individual's responsibility to make sure that he/she is properly insured in all the relevant areas.

Life insurances are also called life assurance, life cover or life policies and belongs to the category long term insurance. Long term insurance, as the term suggests, simply means that you commit to the policy for a long period of time (usually for years on end) and not only for shorter intervals such as in the case of car insurance or house insurance.

A life insurance policy is basically a legal contract between an insurer and the policy holder. The policy holder commits to a monthly payment to the insurer and the insurer agrees to pay a designated sum of money when the insured person passes away. Life insurances (as with all other policies) can however work in more way than one and it is important to discuss your specific needs and requirements with an insurance agent or broker before obtaining your policy.

For example, some life insurance policies will only pay out when the insured person dies, while other policies will pay out in the event of terminal or critical illness. In some instances the cost of the insured's funeral will be paid for from the policy, in other instances it won't be included. Another thing that is vital to understand is that the policy owner and the insured don't not necessarily have to be the same person

Let's use a family man with two children as an example. If the head of the house obtains a policy on his own life, he is the insured as well as the policy owner. Obviously this policy will not be paid to the insured when he passes away, as that will make no sense at all In this example the policy might be to protect the man against critical or terminal illness, when he will no longer be able to provide an income for his family. It is however also possible that the wife in this example can buy a policy on her husband's life. In this scenario the husband is the insured, but the wife is the policy holder. When the husband passes away the wife (as the beneficiary) will then receive a pay-out from the insurance policy which can be applied to take care of her and the children.

Obtaining life insurances should be regarded as a very important action to take. Speak to your local insurance agent or make use of a broker to explain the different types of life insurance policies and then make an informed decision. Remember that the unexpected can happen tomorrow - you never know when your loved ones will be standing next to your open grave. Make sure that you prepare for the future by getting your policies in place as early as possible.