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Have your living expenses gone up in the last year, have you taken on more debt, or has your income increased? If you answer yes to any of these questions, you may need more insurance! We investigate when you need to review your sum assured, and how to increase your cover.
Your life insurance policy: has your cover kept up with life changes?
You should review your life cover annually, to check that the sum assured is enough, but also if your circumstances change, including:
Your cost of living increases
With inflation at 5.3% (March 2024) and healthcare, transport and education costs all increasing, on average, at 6% or more, chances are that your living expenses are a lot higher than they were a few years ago! Check your sum assured and make sure that it accommodates inflation and other increases. If not, you might need to increase your cover.
If you've got a question our client services consultants are here to help. Leave your details and we will call you back.
Your family grows
When you welcome a new baby into your family, start caring for a relative or extended family member, or even become part of a blended family and care for new family members, your expenses increase, from your monthly grocery bills to school fees. Your sum assured also needs to increase to ensure your new family member is well looked after.
You get a salary increase
When your salary increases do you spend time thinking about what you will buy with your extra cash? Well, how about more cover as well? If your increased income means an upgrade to your lifestyle, perhaps a new car or bigger house, or more expensive school, your current sum assured needs a review!
You take on more debt
Your debts have to be paid when you pass away, and if you are married in community of property your spouse will be liable for your debts in full. If you have taken on more debt, perhaps vehicle finance or a home loan, or credit card or store card debt, make sure these are covered either by credit life insurance or life insurance so your loved ones are not burdened with generational debt when you pass away.
You want to make sure your estate can pay all costs and taxes
When you pass, all your assets form part of your estate, and before they can be distributed to your heirs all costs including taxes and executor fees, and all debts, have to be paid. These costs and debts add up, and reduce the funds available to your loved ones. In some cases, assets such as the family home need to be sold to cover costs and debts. But, life cover payouts for valid claims can be used to cover some of these costs and your debt! Alternatively, you can consider a 1Life Wills and Estate Plan to cover these costs.
Top tip: Make sure you have a valid will and estate plan! Speak to your financial adviser or lawyer, or sign up for the Truth About Money wills and estate benefit today.
Your funeral policy: has your cover kept up?
Your funeral policy ensures you, and any additional family members covered on the policy, can have a respectable funeral without worrying about how to pay for it! Funeral expenses can increase over time, so you should check your sum assured for each member when:
Inflation goes up
Funeral costs are affected by inflation as much as any other cost, so when inflation rises your funeral may cost more.
You welcome a new family member
Welcoming a new family member, caring for an older relative or extended family member, could mean you need to pay funeral costs when the time comes. Adding these new family members to your funeral policy as additional members, ensures these costs are covered.
Child members get older
Children under the age of 6 years are allowed a maximum cover amount of R20 000. This increases to R50 000 when they are over the age of 6 years. If you have child members on your policy and they are now older than 6 years, a higher sum assured may be appropriate.
Get expert help to ensure you have enough cover for your needs
Taking all these points into consideration, you can use our life insurance calculator to work out if you have enough cover, or ask a financial adviser to help you determine the appropriate sum assured for your unique needs.
How to increase your sum assured
1Life Insurance life and funeral cover policies have several ways to increase the sum assured, including:
Annual inflation aligned increase in sum assured on life cover and funeral cover policies
Your sum assured may increase annually with inflation, depending on your policy terms and conditions. You can check this in your policy documents that you can access on the online policyholder services portal or WhatsApp service centre.
If your sum assured does not have an annual inflation aligned increase, it may increase from time to time, when 1Life Insurance reviews all policies in line with risk and inflation changes, such as once every five years. Make sure these increases cover all the increases in your expenses!
Applying for an increase in cover on a life cover or funeral cover policy
You can, at any time, apply to increase your cover. Your financial adviser or skilled 1Life Insurance consultant will assist with this application.
Using the Guaranteed Assurability benefit on 1Life Pure Life Cover policies
This benefit allows you to increase your sum assured without underwriting, with only an HIV test, on every third policy anniversary, up to a certain amount. One of our 1Life Insurance consultants can help you increase your sum assured using this benefit.
Affordability
The big question: How much will increasing your cover cost? It may be less than you think and it’s definitely worth finding out!
A 40-year female non-smoker who increases her life cover from R600 000 to R1 million pays an extra R24 a month! For more than double the cover, R1.25 million, she will pay R40 more each month. Premiums will depend on your policy, benefits and individual risk factors. Speak to your financial adviser or skilled 1Life Insurance consultant for a quote today!
Be prepared
It’s tricky to manage the budget when inflation and other costs go up, let alone think about increases in your sum assured. And when your income increases or you welcome a new family member, it’s easy to forget that your financial plans and insurance needs have changed too! But it’s also essential to make sure you and your loved ones have the appropriate amount of cover! Check your sum assured at least once a year or when your life and financial circumstances change so your loved ones have all the cover they need.