Five essential steps to apply for life cover

Your life insurance policy will change your loved ones’ lives for the better! The pay-out from a valid claim means their financial future will be secure! But taking out a life insurance policy is a big commitment. You need to ensure you have taken out a policy from a trustworthy insurer, that the sum assured and premium are both appropriate and affordable, and more! This is what you need to consider when getting your life insurance policy.

1. Work out how much cover you need

The first step you should take when selecting any financial product is to determine if the product will meet your financial needs. What you need to know about life insurance is that it is intended to cover the financial shortfall when an income earner passes away.

To work out if you need life cover, make a list of who relies on your income, and what they would require to maintain their standard of living (the soft life) when you are no longer around to provide for them. If you have family, dependants, even distant relatives and friends who rely on you and your income, in money or in kind such as transport, babysitting, cleaning and cooking, you need life insurance. You can work out how much cover you need using life insurance calculators as a guide, or ask a financial adviser to determine the appropriate amount of cover for your need.

2. Research, compare and select insurers

When you know why you need life cover and how much you need, you are ready to select a life insurance company! Find out who offers life cover, and ask them for quotes for the amount of cover you need, so you can compare the premiums from different providers. You should also research insurance companies to check their reputation and commitment to client service.

Tips to choose a trustworthy and reputable insurance company

• Make sure they are registered with the Financial Sector Conduct Authority. This means they have to follow rules and regulations, and that you have recourse should they not fulfil their obligations.
• Visit their website to see if they offer flexible products that you can tailor to your needs
• Find out about their claims process, how long they take to process claims, why claims would be declined, and what documents you need for a claim.
• Ask how they communicate with clients such as via email, call centres and how often.
• Read through their FAQs as well as their product guides and terms and conditions to see if they explain terms and insurance jargon in plain language that you can understand so that you can answer the question “What do I need to know about life insurance.”
• Make sure they have a complaints resolution process and that it is well documented on their website.
• Check if they allow for policies to be updated and managed online using a digital platform.
• Ask what extra benefits the insurer offers, such as free financial literacy courses, legal assist and benefits and rewards, as these can put money back in your pocket and should be considered when getting life insurance!

Getting quotes

This is an essential part of taking out life cover as you want to be sure you select a policy that offers the cover and benefits you need, at an affordable and competitive premium!

Most reputable and trustworthy insurers will offer online quotes so that you can see how much a certain sum assured will cost, based on a few factors such as your age and gender, and whether or not you smoke. But, always remember that it is a quote, valid for a short period of time, and is based on limited information. One of the things you need to know about life insurance is that insurance companies will underwrite applications based on more detailed information, including your health information, which can change the cover amount, benefits and premium amount on the quote.

Comparing quotes

The general comparison rule applies: compare like with like! Not all quotes are the same and they may not include the same information. This is an important consideration when you are getting life insurance. For example, when you compare quotes it is easy to only look at the premium amounts each insurer has quoted to see how they differ. However, you should also make sure the sum assured and benefits are similar to make meaningful comparisons.

Finally, and perhaps most importantly, make sure you take premium increases into account. Premiums may be flat (no increases) for a short period of time or indefinitely, they may increase in line with inflation each year, or they may increase according to age, which is called age rated premiums. Typically, flat premiums will be higher at the start of a contract than age rated premiums, but lower in later years. Quotes, and/or insurance companies and financial advisers, must explain in full how premium increases work and what future premiums could be for you so you can accurately compare insurers.

Making a decision

Take as much time as you need and make sure all your questions are answered and that you fully understand the product and how it works. When you are ready, select your insurer and apply for cover, which you should be able to do online or over the phone, or with the assistance of a financial adviser. Answer all questions on the application form in full and accurately, leaving nothing out – you’ll see this again below but it is worth repeating! Answer in full!

3. Choose your beneficiaries

Your beneficiary or beneficiaries will receive the pay-out for a valid claim, so choosing the right beneficiary or beneficiaries is definitely something you must consider when taking out a life insurance policy. Here are some tips to help you choose your beneficiary:

• Choose a person(s) – this may seem obvious, but it is much better than choosing an estate or trust!
• Choose a person(s) over 18 years old – minors cannot legally take possession of an inheritance until they turn 18. You can name minor children as beneficiaries, but you need to set up a trust for them to benefit, or the proceeds will be paid into the Guardians Fund and administered by the Master of the High Court until they turn 18
• Choose a responsible person – who will use the pay-out for purposes you intended

You must give the full name, ID number and contact number of your beneficiary(ies) on your application form. You should also talk to your beneficiary(ies) and let them know the details of your policy, how to claim, and why you took the policy and selected them as a beneficiary. You can read more about choosing a beneficiary in this blog.

4. Get underwritten

You’ve done your hard work, now it is time for the insurance company to do theirs! They will assess your application, verify any details and underwrite your application, which is when they use various factors to determine your risk, and the appropriate premium for the sum assured requested.

Underwriters take your health, age, occupation and gender into account to determine your life expectancy. This information is all available on your application, so make doubly sure that you answer all questions accurately and completely, leaving nothing out. One of the most important things to know about life insurance is that not disclosing important information, such as you have a heart condition, can lead to claims being reduced or declined. You may also be requested to take some medical tests such as an HIV test, blood pressure and blood glucose check.

5. Get your contract and start paying premiums

Nearly there! So far you have researched insurers, received quotes, applied for a policy, selected your beneficiary, been underwritten and accepted a policy contract! Well done! You have life cover. Just two more things to be sure of:

Get your policy contract

This is your policy document and your insurer will email it to you so that you have a copy on file, you should also be able to access details online.

Start paying premiums

Your insurer will give you the details of your premium dates so that you can check there are sufficient funds in your bank account each month when the premium is deducted! Keep paying your premiums and you have taken care of your family’s life insurance needs! You should also make sure that your debit order is confirmed via DebiCheck, a secure and reliable way to manage debit orders.

1Life Insurance for your life cover needs

1Life Insurance makes taking out and managing your policies easy and convenient. You can read all you need to know about what to consider when getting life insurance on our FAQs and blogs! You can get quotes online, buy online and save up to 13% on your monthly premiums, and access and manage your policy on the online policyholder services portal and WhatsApp service centre. 1Life Insurance offers life cover that can be tailored to your needs and budget. We are committed to paying valid claims quickly, so your policy can empower your family and offer them financial stability. Talk to a skilled 1Life Insurance consultant today!

Review and keep your cover

Now that you have life cover, don’t forget about it! Remember to review your policy regularly to make sure it still meets your needs, and pay your premiums when they are due. Always update your insurer if any of your personal details change such as you get a new job, change bank accounts or change contact details so that they can stay in touch!