2016-10-27

It’s 5pm and you’re about to leave work when you get a call that starts with those dreaded words: “I wonder if I could have a few moments of your time?” “Ah! Not another telemarketer trying to sell me a gym contract or life insurance policy,” you think… 

“Why should I care about life insurance anyway? Isn’t it for old, sick people? Or the mega-rich? And come to think of it, shouldn’t it be called death insurance?”

We hear you! No one wants to think about death, but there is a reason why they say: “Nothing in this life is certain, except death and taxes.” We are all going to die. And you don’t want to be “that guy” who left his kids with nothing …. 

What is life cover and how does it work? 

Life cover (or life insurance) is a way of looking after the people who depend on you like your spouse or children, business partner or family members.  You pay a monthly payment (premium) towards a policy that will pay money to a beneficiary of your choice. So even if you’re no longer there to provide for them, you leave a lasting legacy and live forever through your financial contribution.

What we love about life insurance:

  1. Cheap, customised cover – With most reputable insurers, you can customise your cover, keeping your premiums low and choosing whether you want the money to be paid out in a lump sum or monthly.
  2. You can nominate a specific person to receive the payment-  The good news is that your daughter Sally’s deadbeat husband doesn’t get anywhere near the money.
  3. Payouts can be used whichever way the beneficiary sees fit – To settle debts, tax, estate duties, buying out your business partner, administration fees, hospital expenses, education – you name it. Unfortunately, it also means the same Sally can use her payout to fund a cult in Mexico. Nothing you can do about it.
  4. 4.     You create wealth for the next generation – If you don’t want your children to struggle the way you did you can provide a legacy for them. No pressure. 

What you need to consider when getting life insurance: 

  1. If you cancel your life insurance, you will lose everything you have paid in – EVERYTHING. No exceptions.
  2. It could take anywhere from a few weeks to a few years to pay out – That means you can’t rely on it for immediate expenses unless you have a policy that has a death benefit or funeral policy built in.
  3. Life insurance does not pay out if you’re behind on your premiums – Some companies give you a 30-day grace period, but sadly if you changed bank accounts and forgot to move your debit order and the unthinkable happens, there’s no payout… Nada.  For an extra premium some insurers do provide cover in the instance of a “life-changing event” like retrenchment.
  4. You may need to have medical tests done before you are accepted – If needles freak you out, this could be a deal-breaker.
  5. Your policy could not pay out at all – Yep. There is actually a list of times that your policy might not pay out: Suicide or self-harm, dangerous or adventurous sport activities, drug overdose, pre-existing medical conditions, lying on your application form, being over-insured, if the beneficiary is under 18 or the deceased is over a certain age and of course, if you were killed in an act of war. So, you can’t take out a life insurance policy and then go all “Romeo-and-Juliet” and you definitely can’t try that “cool new cage-diving with sharks experience where they leave the cage just a little bit open.” Check the fine print of your policy carefully. 

At Moneyshop we hook you up with trusted life insurance providers with customisable cover to cater for all your needs. You have control over the amount of cover and who receives the payout and you get the credit for looking after the ones you love.