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An important part of buying a 1Lifedirect life insurance policy is nominating your beneficiaries. A beneficiary is the person that will receive your life insurance payout in the event of your death.
As a 1Lifedirect policy holder you can nominate up to 6 beneficiaries and allocate a percentage of your life cover payout to each of them. Obviously the percentage each receives must total your full life cover amount.
1Lifedirect strongly advises that policyholders nominate beneficiaries. If there is no beneficiary listed on your policy the sum assured is paid into your estate. Estates can take months, even years to wrap up, leaving your dependants without access to the very money you intended them to receive on your death. Speaking of estates, writing a will can expedite the settlement of your estate. You can download a free will template from the 1Lifedirect website.
If your beneficiary is underage, 1Lifedifrect will pay your funds into a trust. Should you nominate a minor beneficiary we recommend that you set up this trust yourself and specify how and when the funds will be transferred to the minor. If you do not do this, the responsibility for setting up the trust lies with the family of the underage beneficiary.
Selecting the names of your beneficiaries, as in drawing up a will, is not as simple as it may sound. We would strongly recommend asking your financial planner for input and advice as there are a number of technicalities and legalities to consider. If you don’t have a financial advisor, approach your bank. They will be able to assist you. And remember to regularly update your list of beneficiaries. Marriage, a divorce or a new child could all influence the beneficiaries that you have chosen.
Remember that your life insurance payout is intended to help your beneficiaries cope without your income. They can choose when and where to use it: to pay off debt, cover living expenses, cover education costs etc. Your life insurance cover is not intended to secure your beneficiaries financially for the rest of their lives.
Pure life cover from 1Lifedirect will pay out up to R6 million to your nominated beneficiaries. You have the option to add up to R4 million disablement cover and R2 million dread disease cover to your life policy.
Whoever your beneficiaries are, you know that your life insurance payout will give them the financial stability they need in the event of your death.
