I just turned 28 and only recently learned exactly what life insurance is. Now with some clarity, I can answer this… is life insurance just a scam? Actually, it’s not that black and white. In fact, it’s more of a gamble than a scam. By not having a life insurance policy, you are effectively betting insurance companies that you won’t die, and then you hope you don’t.
far you’re winning, you’re obviously not dead. So why are you paying R500 + every month if you’re not going to die today?

In 2016, SA experienced a 1.75% death rate, doesn’t sound like much does it?

Well, if you take the total population of 48,339,286 it means that 854 937 people died last year Sounds like a bit more now.

So 85000 odd people lost that bet last year. A survey done by FinScope, showed that in 2016 only 22% of adults had insurable cover So optimistically only 188 000 odd people that lost their lives had life insurance.

What about the 620 000 odd people that didn’t have life insurance? Well, they’re no longer here, it doesn’t really matter to them, sadly, they’ve left a pretty bad situation for their families.

The purpose of life insurance is to pay out a sum of money to the beneficiary of the life insured. Simply put if I (life insured) die today, my insurance company will have pay my wife (beneficiary) a whole lot of money. So, If I disappear, investigate my wife, haha. Seriously though, that money should replace the money that I bring to the family, so that even though I’m gone, my family is provided for, financially.

Each life policy is structured differently based on your needs as a family. In my case, I have a bond, a financed vehicle, and I generate an income. If I die today, my insurance company would need to settle my bond, my financed vehicle and pay my wife a monthly income. That’s what my monthly premium guarantees me.

Back to those 650 000 people that lost their lives without having life policies. Their families have been left with nothing, some of them have been left debt, with no income, school fees to pay etc. In some cases, they would have their houses and cars repossessed.

Is this how you want to leave the people you love?

I’ve painted a pretty good argument for Life Insurance, but you’re a healthy person, you drive with minimum risk, the chances of you kicking the bucket anytime soon are pretty remote right?

The average life span for a South African is 50 years. Most Life policies cover you until the age of 65. Assuming your time in the gym and your healthy diet get you past 50, are you confident you can surpass 65?

How many of those 80000 lives lost do you think woke up and decided they were going to die that day? None…they probably had the same thought you do right now “It won’t happen to me.“

Scary thought, but today might be your last.

Perhaps it’s time to stop gambling with your life, and the lives of your loved ones.

If I’ve managed to talk some sense into you, and you haven’t insured your life, then it may be worth getting a quick quote.

Until next time,
The MoneyShop.co.za Team