Are you over 65 and want to invest in life cover? Or are you under 65, but have elderly parents who need life cover? If you have answered yes to either of these questions, this guide is for you.
It’s important to understand how life cover for over 65s works and whether you should consider it. How to claim (so that you get the payout as fast as possible) is also explained.
What is life cover for over 65s and how does it work?
Life insurance protects your loved ones financially when you’re no longer around, become disabled or lose income. It’s a great way to care for your family if you have a spouse, children or other dependents.
Life insurance is an agreement between you and the insurance company that pays out a lump sum to your family. In exchange for insurance coverage, you pay a monthly premium tailored to your insurance needs.
All of us — including people over 65 — need to have life insurance because you never know what tomorrow will bring. Disability can occur at any time, but the chance of it happening increases with age, meaning older people are more susceptible. Life insurance can be beneficial in this situation.
The payout from an insurance company can be used for a variety of purposes depending on the event that occurred. For example, if you die, your family could use the payout to cover funeral expenses, pay off your debt or for other expenses.
If you’re married and die while your spouse is still alive, it can be very hard for some to live alone. The payout from life insurance can be used to support the surviving spouse, including covering things such as medical bills or relocation.
If you still have dependents, such as school or university-going children, the payout from life insurance for people over 65 could be used to cover their education costs. This means that you can be confident that you’ve secured the future of your dependents.
What does life insurance cover?
There are various types of life insurance coverage. The most common life insurance provides a death benefit — a lump sum that goes to your beneficiaries. When you hear someone talking about life insurance, it’s probably this type.
Budget insurance offers two types of life insurance: Budget Life Basic Insurance and Elevated Life Insurance. Both of these insurance types provide cover from R50,000. Budget Life Basic Insurance pays up to R200,000 while Elevated Life Insurance can go up to R10 million, depending on your specific policy.
While traditional life insurance cover is important, it’s worth considering other types as well. Three other important types of life insurance are:
- Disability insurance: A policy that pays out a lump sum in the case that the insured becomes disabled due to physical injury or illness.
- Dread disease insurance: Also known as critical illness cover, this insurance pays out a lump sum if the insured person is diagnosed with critical illnesses like cancer, as well as the effects of heart attack and organ transplants.
- Terminal Illness: An insurance cover that pays out a lump sum if you die within 12 months of being diagnosed with a terminal illness. A terminal illness is one that doesn’t have a known cure and could result in death within a year.
Each insurance discussed above can be crucial, especially if you’re a breadwinner in your family. People over 65 can still have dependents, making these types of insurance vital for them.
Can I get life insurance for my parents?
If you’re younger than 65, you might be wondering if you can take out life insurance for your parents. Absolutely. When your parents pass away, a life insurance policy can help take care of your family’s financial needs.
Each family and individual has unique life insurance needs. For example, your parent or parent-in-law might have a large debt that needs to be settled when they die. The minimum life cover required should be enough to pay it, including any interest added.
It’s helpful to perform a quick financial needs analysis that includes estimated funeral expenses, debt and any other financial obligations your parents may have. Add up these expenses to work out the minimum amount of life cover needed. You also need to consider what type of life insurance is suitable for your elderly parents. Finally, you and your parent(s) should decide who will own the policy and who will pay for it.
How do I submit a claim for a life insurance payout in South Africa?
Having life insurance is a great way to ensure your loved ones can lay you to rest without having financial difficulties. If you incur a critical illness or become disabled, life insurance can lighten the financial burden of looking after you.
However, all this thoughtful financial planning means nothing unless you and your family know how to claim. It’s worth putting claim information together with your will to make it easy for your loved ones to claim. With that in mind, here’s how to claim life insurance:
- Contact a consultant at your insurance company. This professional will help your loved ones through the claims process to avoid facing payout delays.
- Submit the required documents, which often include:
- A filled-in claim form
- In the case of death, a certified copy of the death certificate of the insured
- Certified ID copies of the beneficiaries and the deceased
- Other documents, as directed by the consultant, which may include medical records
Once you’ve submitted all the required documents, your insurer will process your claim as fast as possible. Funeral cover claims are generally processed faster than life insurance claims.
Common questions about life insurance for over 65s answered
Do you have more questions you’d like answered about life insurance for people over 65? If so, here are a few common questions with relevant answers:
What happens after a life insurance claim?
Your claim and the accompanying documents will be forwarded to an assessor. The assessor evaluates the claim to determine if it’s legitimate and gives you advice about the next steps. If the assessor deems the claim valid, your insurer will process your payment.
How much does a life insurance policy for over 65s cost?
People have varying risk profiles, meaning that the cost of life insurance differs from one person to the next. A younger person generally pays a lower premium than an older person for the same amount of life insurance cover. However, in some cases, an older person may not be as risky to the insurer as a younger person. Ultimately, your risk profile will determine how much your premium will be.
Is there a maximum age for life insurance in South Africa?
The short answer is yes. Many insurers limit access to life insurance to people 65 years and younger. Keep in mind, however, that there’s no law in South Africa that limits the maximum age for life insurance to 65.
It’s important to understand that the maximum age limit may vary from one insurer to the next. Premiums tend to be higher for older people compared to younger people. Part of the reason for this is that your health tends to weaken as you grow older, increasing the risk to the insurer.
Get life insurance for over 65s
If you’re 65 years or older or you have an elderly parent you want to get life insurance for, look no further. Contact Budget Insurance for a free, no-obligation online life insurance quote for over 65s.
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