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Millions of South Africans have life insurance policies that protect them and their loved ones. But life insurance is not always well understood. Many consumers believe, for example, that you cannot get cover if you have a chronic condition or that life insurance is unaffordable! We debunk these and other life insurance myths and explain the facts about life cover in South Africa.
Life insurance myth #1: You cannot get cover if you have a chronic condition
Truth: You could get cover with a chronic condition.
Chronic conditions include diabetes, high blood pressure, high cholesterol, asthma and HIV. Whether or not your chronic condition affects your life insurance policy depends on how serious it is and if you monitor and manage it, following professional medical advice.
If you have a chronic condition that you monitor and manage well, you may qualify for cover at standard rates, the same rates as a person with no chronic conditions. If your condition is more severe or too high risk, your insurer may charge a higher premium for cover, or offer accidental death cover instead that covers you only for death due to non-natural causes, such as a car accident.
If your chronic condition affects your life and health extensively, for example you cannot work full time, an insurer may not offer life cover, or as much cover as you applied for, or they may offer cover for death due to accidental causes, such as a car accident, only.
Interesting life insurance fact: Insurers need to know that you monitor and manage any chronic conditions. For example, they may need to know that you attend regular GP check-ups for your particular condition to make sure that your medication is working.
Life insurance myth #2: Applying for life insurance is a tedious process
Truth: You can apply and be accepted for life insurance in a matter of minutes.
Many insurers have made the life insurance application process much faster than it used to be! Although you still need to answer several questions, and explain in detail any medical conditions and treatment, your application can take a matter of minutes rather than hours and days, sometimes weeks!
Remember that your life insurance policy is a contract, so you do need to make sure you answer all questions accurately and honestly.
When your application is completed, an underwriter will assess it and either offer cover or request further information. Only in the most complicated cases does this take more than a few days! For the majority, policies are offered in a matter of minutes!
If you are looking for cover in a hurry, you can get a 1Life life insurance quote and buy your cover online in under 15 minutes. And you’ll get great savings of up to 13% on your premiums!
Interesting life insurance fact: Underwriting is often automated. Insurers have developed smart underwriting platforms that have reduced the time it takes to apply for a life insurance policy.
Life insurance myth #3: You only need life insurance if you are married with kids
Truth: If you have loved ones who depend on you, you need life insurance.
Life insurance is intended to help your loved ones financially if you are no longer around to provide for them. Traditionally, people took life insurance if they were married with kids so their spouse and children would have financial security if they passed. But life has changed! Today, there are single mothers and fathers who need and have life insurance. There are singles caring for family members who need and have life insurance. Life insurance is a must have for anyone who supports family members and loved ones.
Interesting life insurance fact: Life insurance can be taken with additional covers such as disability insurance and dread disease cover. These can ensure a life assured has cover in the event of a disability such as losing a limb or is diagnosed with an illness such as cancer!
Life insurance myth #4: There are lots of terms and conditions hidden in the fine print
Truth: Life insurance contracts are written in plain English with important terms and conditions highlighted.
Life insurance is a contract and so there will be terms and conditions (Ts and Cs). These are important to read and understand. However, they are not complicated, and they are written in plain language, so they are easy for everyone to understand. Your insurer must also point out the most important terms and conditions to you to make sure you understand them and your policy.
Important Ts and Cs include:
- You must fully disclose all health information
- You must answer application questions honestly and in full
- You must pay premiums when they are due
- You must understand any waiting periods or exclusions on your policy
- You must notify your insurer of any change that could affect your risk, such as taking up smoking changing jobs, participating in a dangerous hobby and travelling outside South Africa for an extended period of time
Interesting life insurance fact: Life insurers and your financial adviser, if you have one, will communicate frequently with you and share important facts about your policy. This includes everything from how to update your policy, how to claim, and important policy Ts and Cs. Read these emails and newsletters to help you understand your life insurance policy! You can also visit your insurer’s website to find out more about your policy.
Life insurance myth #5: Life cover is unaffordable
Truth: Premiums and cover can be tailored to meet your budget.
Life insurance comes in many different shapes and sizes, which means you can find the right amount of cover for you, at a premium you can afford!
Interesting insurance fact: Smokers pay much more for life cover than non-smokers, sometimes as much as twice the amount. Smoking, whether it’s vaping or smoking tobacco or any other substance, puts your health at risk and reduces your lifespan. Kick the habit and you will save on life insurance!
Life insurance myth #6: Insurers don’t like to pay claims
Truth: Most claims are paid. It is the exception for a claim to be declined.
An insurer that doesn't pay claims will quickly get a bad reputation and consumers will avoid taking out their policies. This doesn’t mean insurers don’t evaluate claims and validate them – they do. To make sure the claim is paid to the right person and there has been no fraud and no non-disclosure, insurers will assess claims. But every day, life insurers pay claims to family members who have lost loved ones and can continue living their lives without financial stress.
Interesting life insurance fact: South African life insurers paid R287.1 billion in claims and benefits in the first six months of 2023.
Life insurance myth #7: I have to undergo a medical exam
Truth: Going for medical exams is an exception, not the norm!
Most life insurance companies keep application processes as quick and as painless as they can, which means no or few medical checks and no medical exams. They will, however, ask you detailed questions about your health when you apply for life cover, including information about any previous or current illnesses. You must answer these questions in full and truthfully, or you may be guilty of non-disclosure - which can lead to claims being declined. Insurance companies often also ask for basic medical checks such as an HIV test, as well as blood pressure, blood glucose and cholesterol tests. These can be done at a pharmacy near you at a time of your convenience. Medical exams where you are checked by a GP are unusual, very few applicants have these checks today!
Interesting life insurance fact: Don't worry if you've got a needle phobia! 1Life Insurance will ask for an HIV test, which can be a simple saliva swab – no needles required.
Life insurance myth #8: You’re too young to have life insurance
Truth: From the age of 18 you are old enough to have life insurance, and you and your loved ones can benefit from your policy!
A South African's average life expectancy in 2024 is 65 years. However, many young people die earlier than this age.
If you contribute to your family's finances, in cash and kind, a life insurance pay-out for a valid claim can ensure you continue to support your loved ones financially when you pass. So, anyone who supports family and loved ones, has a genuine reason (known as insurable interest) to take out a life insurance policy as their beneficiaries would benefit!
In South Africa, you can take out a life insurance policy from the time you turn 18 years old until the age of 65 years.
Interesting life insurance fact: You may benefit from lower premiums by taking out insurance early, when you are young and healthy! If you wait until your older years, and have a chronic condition, such as high cholesterol, your premium could be higher!
Fact check before you believe
Millions of policyholders across South Africa have life insurance policies. These policyholders trust that when the time comes, their claim will be paid. The myths are rarely true. If you are wondering if a myth is true, why not ask your insurer or adviser for the truth!