Life cover – or a life insurance policy – is one of those things that we try not to think about too much. But it’s a necessary consideration for most of us, especially if we’re serious about taking care of our loved ones, should we no longer be able to.
Perhaps even more uncomfortable is the thought of planning for the day we lose our parents. But if we’re serious about protecting all they’ve worked so hard for, we need to consider life cover for them. Fortunately, children are able to insure their parents in South Africa, providing for some financial peace of mind.
Note that life cover and funeral cover are not the same thing. A funeral cover policy will simply take care of expenses related to the death and funeral expenses of the insured. A life policy covers more than death; it can also cover disability and terminal illness, and in the case of a whole life policy has some element of savings.
Let’s look at some of the options for life insurance South Africa has to offer.
What is Life Insurance?
First, let’s clearly define what we’re talking about. Life insurance or life cover is essentially a financial “life policy” that is meant to provide for your family or beneficiaries should you die or be diagnosed with a terminal illness.
In most cases, it is used to settle any debts of an estate, such as an outstanding bond on a property. Most policies pay a lump sum for the insured amount. It can therefore also be used as an investment to provide for those you leave behind.
Several options exist for life insurance policies. Ultimately, though, the best life cover is the one that’s affordable and takes care of the needs of its intended beneficiaries.
Find the Best Life Cover for Senior Parents
There are some factors to consider when looking for the right life cover for your parents. Most important among them is your parents’ age. Many policies will also ask for blood tests or a medical examination, and sometimes an HIV test as well. Here are some guidelines:
Life Cover for Parents Over 60 in South Africa
Some insurers may still offer a fixed-term policy, known as term life insurance for your parents at this age. This means a policy taken over ten or fifteen years. The advantage of a fixed-term policy is that premiums tend to be lower.
The alternate option is a whole life policy, which covers for as long as your parents are alive, but with higher premiums. The plus side is that should you decide to terminate the policy, you are likely to receive at least some of your investment back.
Life Insurance for Parents Over 65 in South Africa
Generally, the older the applicant, the harder it will be to find life policies available to them. That does not mean that insurers will dismiss the application out of hand. Here, factors such as the general health of your parents will come into play. Most insurers in South Africa limit their policy-insured at age 65, so it’s worth acting on this policy before this threshold.
Life Cover for Over 70 in South Africa
If your parents are over 70, the best life cover option to go for is a whole life option. This will consider the possibility that your parents still have several years ahead of them, should they be in good health. Premiums are likely to be higher, though.
Life Cover for Parents Over 75 in South Africa
At this stage, it may be easier to consider investing in a private savings plan, as many insurers will not provide coverage, or the premiums may simply be too high.
Top Providers Of Life Insurance in South Africa
Most companies will gladly life cover quotes online or via callback. In most cases, if you’re trying to insure your parents, one of their standard policies will apply, though premiums will typically be higher. Here are some of the best providers, according to customer satisfaction surveys.
Old Mutual insurance offers three basic life cover options. Greenlight cover starts from R100 000 and pays out in as a lump sum when the insured dies.
The Final Expenses benefit is designed to cover a funeral and immediate expenses with a portion of the policy paid out immediately. You are usually able to include extended family such as your parents. Disability and retrenchment cover can be added as optional extras under both of the above policies.
An Accidental Death policy is also offered, covering up to R2 million.
Avbob’s CashbackLifestyle Policy is one of the few whole life policies that make a point of saying it is available to anyone up to the age of 80. One of its major plusses is the 20% cashback after five years of being claim-free.
Sanlam’s Indie Life Cover insures for up to R10 million but offers R50 000 that can be paid out quickly – a good option if you anticipate the need for covering immediate expenses like a funeral. The Matrix (up to R5 million) and Matrix Premier (over R5 million) options can include a 100% premium cashback benefit after 15 years being claim-free.
1Life also offers a R50 000 portion payout immediately, covering the immediate expenses. But it also guarantees that your premiums will not increase for at least 24 months.
Discovery’s Life Plan allows you to link all your Discovery products. This means you can benefit from major discounts on premiums if you’re a Vitality member or are a member of any other Discovery product. There’s also a payback benefit, which rewards your healthy habits with up to 50% of your premiums back.
Liberty’s Lifestyle Protector policy is designed as a flexible solution for people in any stage of life. Aside from a standard life insurance plan, the policy will pay out in full upon diagnosis of terminal illness if you so choose.
Hollard basic policy insures for up to R1.2 million, with a 20% cashback benefit after five years.
OUTsurance guarantees that your premium is fixed for five years. The premium is also calculated on your specific circumstances, so if the insured is in good shape, the premium can be significantly lower. They also promise immediate cover. Get a quote here:
What to Consider and What to Avoid When Looking at Life Cover for Parents
When taking out a life insurance policy for your parents, it’s important to remember that you still need their consent. You will also need to prove that their passing would expose you to expenses that you cannot afford.
Note that on policies for older people, premiums tend to be higher. The best alternative to taking out the policy yourself is to take over the payments on their existing policy, should they have one.
Final Thoughts on The Best Funeral Insurance For Seniors
In order to find the best life insurance quotes for your parents, you’re going to have to do a little legwork. The older they are, the harder it may be to find an insurer, so it’s best not to delay if you’re serious about taking out a policy. Ultimately, it will provide some peace of mind for any financial obligations arising from their passing.