Choosing a life insurance plan shouldn’t be a reason to stress. Although there are different types of life insurance, deciding on one is easy if you know what you require and how much you’re willing to pay.
There are two primary categories of life insurance: term and permanent. However, there are several different types within each category. Below are some of the most common types explained more clearly.
Consult an agent at FRANK.net for a better understanding of the various types of life insurance and how they may apply to your specific situation.
Learn about the various types of life cover
The following pointers will help you to determine the best type of life insurance cover for your situation.
Term insurance
This is life insurance under which the death benefit is payable only if the insured passes away during a specified period. Listed below are various types of term insurance.
- Level term – This offers a fixed amount of coverage with premiums that are set over a certain period of time; usually in 10-year increments.
- Increasing/decreasing term – This amount of coverage increases or decreases throughout the term, while premiums typically remain the same.
- Renewable term – Some life cover options include a renewal provision that gives the policy holder the right to renew their coverage at the end of the specified term without submitting evidence of insurability.
- Convertible term – This gives the policy owner the right to convert the term plan to a permanent one.
- Group term – This kind of insurance is usually purchased by an employer or an organisation and is intended to cover several people. This typically results in lower premiums.
Permanent insurance
Providing coverage throughout the policy owner’s lifetime, this type of life cover may include an element that builds cash value.
- Traditional whole life – This type of cover remains in action during the policy holder’s lifetime, provided premiums are paid as stipulated. Whole life insurance may also include an element for building your finances.
- Universal life insurance – Some types of life insurance are characterised by their flexible premiums and negotiable prices. These are known as universal life policies.
- Variable life insurance - Some life insurance policies guarantee that the death benefit will not fall below a specified minimum. This form of whole life insurance – under which the cash value of the policy changes according to the investment performance of separate account options – is known as variable life insurance.
As you can see, although there are many different options when it comes to life insurance in South Africa, they are very similar to one another. All that’s needed is a guiding hand to help you decide which one would best suit the requirements of you and your loved ones.
Contact FRANK.net for more information on the different types of life insurance available today.
