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3 Things You Probably Didn’t Know About a Life Insurance Policy

Friday, December 10, 2021

Life insurance provides financial security and peace of mind for you and your loved ones. However, when it comes to finding the right policy and understanding the vocabulary associated with the topic, it’s easy to feel overwhelmed. Dialdirect is here to make sure you feel confident that you’ve found the right life insurance policy that fits your financial and family needs. At Dialdirect, we believe the best time to find and purchase life insurance is right now, we make it fast, easy, and free to get a life insurance quote.

What is life insurance and why do I need it?


Life insurance is an agreement between an insurance provider, like Dialdirect, and a policyholder (that’s you!) that, in exchange for monthly premiums, the insurer will pay a specified lump sum of money upon the death or other predetermined event of the policyholder. This type of insurance is also known as life cover. The reason it’s important is because it’s essential protection for you and your family primarily focusing on financial support for your spouse and children should you pass away in an untimely manner. Don’t risk cancelling your life insurance policy, it will save you in the long-term. Short-term items, like rent and utility bills, can be covered as well as looking ahead to bigger economic events like paying for university tuition. Beyond the all-important financial support, life insurance will also protect your assets, like your business or home.

3 Things you need to know about life insurance


Now that you’re considering purchasing a life insurance policy, there are three key things you need to know and understand before committing to the policy. Dialdirect understands that no one wants to think about their death unnecessarily or burden their family when they’re gone. So the long-term financial planning of life insurance is an out of sight, out of mind approach, meaning that you take out a policy, and as long as you stay on top of your monthly premiums and update beneficiaries as required, you don’t have to think or worry about it again.

1. There are different types of life cover payouts


There are different life cover payout types* that you need to consider when taking out a policy. For example, lump-sum pays your beneficiaries the full death benefit at once, while instalment payouts come gradually at a predetermined schedule. In addition, lump-sum and instalment payments typically roll into a retained asset account* (RAA), where the beneficiaries can pull the money. With annuities, you make a large payment to an insurance company upfront, and in return, you receive set monthly payments for as long as you continue to live.

2. There are different types of life cover


Dialdirect offers three types of life insurance, making it easy to find the policy that fits your needs and budget. Here is some information on our three product offerings so that you can find the best option for you.

Pure Life insurance: This is Dialdirect’s most comprehensive life insurance plan that takes care of you for your whole life. With this plan, funeral expenses are paid out within 48 hours of death, and if there is a terminal diagnosis with a year or less to live, the full benefit amount will be paid out. Coverage ranges from R50,000 to R10 million.

Dread disease insurance: This comprehensive policy pays out a percentage of your cover in a tax-free lump sum, allowing you to use the funds to subsidise your medical costs or pay for basic living expenses. Even if your full dread disease benefit is paid out, it won’t affect your Dialdirect life insurance. Coverage ranges from R50,000 to R4 million.

Disability insurance: Dialdirect works hard to ensure that facing a disability doesn’t also mean worrying about your finances. Our policy provides coverage from day one, guarantees no premium increases in the first two years, and only requires an HIV test. Coverage ranges from R50,000 to R10 million and pays out in a lump sum.

3. The earlier you get life insurance, the better


The best time to buy life insurance is right now. Not only will you be protected from day one, but you’ll also save money. Did you know that the lowest life insurance premiums are given to healthy and young policyholders? Find out more about the 8 factors that affect your life cover premiums and act now.

Secure your future and get a life policy from Dialdirect


Knowledge and understanding of your insurance options don’t have to be overwhelming and scary. Dialdirect works to make important life decisions as easy and stress-free as possible. Remember, the best time to get life insurance is now. Dialdirect can provide you with a fast and free online life insurance quotes. take the proactive step towards protecting your family if anything happens.

Sources: Forbes 

Dialdirect is an authorised non-life insurer and financial services provider. Long-term insurance policies are underwritten by 1Life Insurance, an authorised life insurer and financial services provider.

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