Choosing a Life Insurance Company: 5 Questions to Ask

In a world where we are mentally prepared to expect the unexpected, there is one thing we are certain of – life is a precious thing. Thus, your choice of a life insurance company is an important decision that you should not take lightly.

In these uncertain times, where a pandemic is an ever-present doom in everyone’s periphery, choosing life insurance has seen a significant increase. An increase of 40% in death claims from South African insurers in 2020 has highlighted the importance of obtaining these policies.

The fear of dying is ingrained within us, but talking about the event of death is a necessary step in life. The world around you does not cease to exist after your passing. So protect the ones you hold dearest and plan for a better tomorrow.

Struggling to choose an insurance company? There is a wide variety of life insurance companies catered to lift the weight of responsibility off your shoulders.  Read this helpful guide and ask yourself these simple questions on how to choose your insurance company, and find your potential glass slipper.

Wedding couple in an embrace

How to Choose a Life Insurance Company in South Africa

In an endless sea of possibilities of life insurance companies, separate the glitter from the gold by having your goals in mind.

There are a number of factors to consider when choosing a life insurance company. These questions are not merely to educate, but also to lend you a helping hand in determining what exactly you are looking for.

What type of life insurance are you looking for?

Your first step in determining a life insurance company should be to decide what type of life insurance you want.

In South Africa, there are two core types of life insurance policies: short-term and long-term. Short-term, or term, life insurance is a fixed rate for a specified amount of time. Long-term, or whole, life insurance is a policy meant to provide you with lifelong coverage.

Whether you prefer coverage for a few years or need a lifelong policy, it’s best to look at the options the prospective company provides.

How to choose a life insurance policy type

While both have their positive and negative attributes, the decision ultimately lies in what type of commitment you are looking for.

One of the main factors is cost. Your calculated monthly premium will determine how to choose life insurance based on a variety of factors. Your age, gender, lifestyle choices, and existing health conditions may alter your life insurance payments per month.

A short-term policy, however, tends to be the affordable option, offering lower monthly premiums compared to most long-term life insurance policies.

Monthly premiums are calculated from a variety of factors. A short-term policy might be more beneficial to a young healthy applicant, but not as effective for older clientele. Ultimately, make sure the company offers packages you are comfortable committing to.

What do you want covered by your life insurance policy?

In the same way life offers endless possibilities for experiencing it to the fullest, there are a variety of these experiences that should be considered in your decision. Whether you crave the adrenaline-fuelled thrill of sky-diving or the wonderful adventure of parenthood, with life comes responsibilities.

From covering your loved ones financially to outstanding mortgage payments, be sure to factor in your lifestyle, financial responsibilities, and dependant’s needs while choosing a company.

Are you scared of being diagnosed with a life-altering disease? Want to find the best life cover options for your parents?  An insurance company offers its policyholders a wide array of life coverage options. So you’ll need to assess the likelihood of various life-threatening circumstances occurring in your life and choose a policy that covers the ones you need it to.

See what type of coverage and policies the company offers to help you make your decision.

Older woman and a child looking at a cellphone

Who is the company’s key demographic?

One thing you should always remember – insurance companies are first and foremost a business.

Some companies, however, have found it a key marketing tool to offer insurance policies catered to various demographics. If you have an existing medical condition there are a variety of companies that specialise in covering them in an effective manner while still being profitable.

Choosing an insurance company should always be about being comfortable with your decision. Researching what the company specialises in could become a beneficial way to determine if their life insurance policies lie in your interest.

Woman climbing a rock climbing wall

Does the company have a good reputation?

It can be easy to fall for the marketing slogans of insurance conglomerates, promising the best deals and services. These establishments are crafted to make you choose their insurance policies over others, so make sure you read the fine print of their policies.

First things first, check if the life insurance company you’re considering is on the list of registered insurers. This list can be found on the South African Insurance Association website.

The insurance companies registered on SAIA follow the SAIA Code of Conduct. These regulations ensure that the company you are considering is above board and does not partake in illegitimate practices.

You can also use websites like Trustpilot to search for and find reviews of your prospective insurers.

Have you compared rates to other companies?

The steps to get a quote on your life insurance has never been easier. A wide variety of insurance websites offering instant quotes has made life insurance easily accessible and tangible to the average human being. However, the first quote is not always what you ultimately will end up paying.

Companies might try to lure you in with seemingly low rates. But, during the underwriting process, where your medical history and other quotable factors are assessed, your rates could become higher.

Be sure to get quotes from a variety of companies. This will help you gather as much information as you can to choose the life insurance company for you.

How to Choose – Life Insurance Companies Made Easy

Family sitting on rocks

It is always a good idea to consider life insurance. It can provide a sense of relief to gain some control over the inevitable and plan to keep your loved ones safe.

Life insurance companies come in all shapes and sizes. These entities are cultivated to ensure the things you care about most will be taken care of if anything happens to you.

But, choosing the correct company can be a tricky business. Ask the above simple questions to determine which company is the right fit for your priorities and responsibilities in your life. And, instead of worrying about death, celebrate life.

We will be happy to hear your thoughts

Leave a reply