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Your monthly premium is the amount you pay for the cover you have, such as R150 a month for R40 000 funeral cover or R300 a month for R750 000 life cover. When and by how much can your premium increase, can it be waived and is it ever guaranteed? We explain important premium terms and conditions and how they apply to your 1Life Insurance funeral and life policy!
1Life Insurance funeral policies: 5 premium terms explained
Premium payment term
This is the length of time premiums are payable for cover, which is how long the contract is in force, unless there is a premium waiver (see below). Funeral insurance premiums are due every month until the death of a main member, or the cancellation of the policy.
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What this means for you and your policy: You must pay premiums every month to ensure you and your loved ones have cover.
Premium guarantee
This is the time during with the premium amount is guaranteed and will not change, other than for compulsory premium escalations, also known as contractual increases (see below). 1Life Insurance funeral policies guarantee that your premium will not increase in the first 12 months of the policy.
What this means for you and your policy: You know how much your premium is and can budget in advance for your funeral insurance contributions!
Grace period
Your policy includes a period of grace for unpaid premiums, provided that first premium payment has been received. If it has, and a subsequent monthly premium is not paid when it is due, you have a 31-day grace period to make up the payment. If you do not make up the payment your cover will be suspended immediately and you won’t be able to claim. We will endeavour to keep you covered by attempting to collect the arrear premium amounts.
What this means for you and your policy: Make up any missed payments within the 31-day grace period or chat to your financial adviser or a skilled 1Life Insurance consultant if you are struggling to make payments so we can help you find a solution.
Premium escalation
Also known as premium increase. An escalation or increase is the amount your premium will increase by, such as 5% or R35, on the policy anniversary, every year.
Your 1Life Insurance funeral cover premium may have:
- An annual inflation aligned increase, such as inflation over the last 6 months plus 3%, or
- A fixed increase such as 5% each year, or
- A flat rate with no increase in premium for the first two years.
Premiums may also increase when the insurer reviews all premiums in line with changes in risk, such as if there is an epidemic and life expectancy changes significantly.
1Life Insurance will let you know in advance of any premium increases so you can plan ahead and budget for the increased amount. Legislation requires that you be notified 31 days before the increase is due to take effect. Sums assured may or may not increase as premiums increase.
What this means for you and your policy: Make sure you know how and when your premium may increase. Your policy documents, available on the online policyholder services portal or WhatsApp service centre, will have this information.
Premium waiver
A premium waiver is a period of time in which premiums don’t have to be paid but the policy is still in force and valid claims can be paid.
1Life Insurance funeral contracts have a two-year premium waiver period after the main member passes away and their valid funeral claim is paid. This means that the additional members covered on the policy still have cover and don’t have to pay the premiums for two years. At the end of the premium waiver period the first spouse covered on the policy can exercise a continuation option, where they can take over the policy as main member. Premiums will then be due and the new main member is responsible for paying them.
What this means for you and your policy: If you have additional members covered on your policy, they can continue to enjoy cover without having to pay premiums for two years if you pass on and the funeral claim is paid.
1Life Insurance life policies: 5 premium terms explained
Premium payment term
The time period for which your premiums must be paid for cover, which is how long the contract is in force. Life policy premiums are due every month until the contract ends – either on the death of the life assured and payment of a valid claim, payment of a valid claim for a terminal illness benefit, or the cancellation of the policy.
What this means for you and your policy: Pay your premiums when they are due and valid claims can be made and paid!
Premium guarantee
This is the time in which your premium remains the same, other than for contractual premium increases (see below). 1Life Insurance life cover policies have a 12-month premium guarantee.
What this means for you and your policy: Knowing your premium is a certain amount allows you to budget in advance so you can pay premiums when they are due.
Premium escalation
Also known as premium increase. An escalation or increase is the amount your premium will increase by, such as 5% or R40, on the policy anniversary, every year.
Your 1Life Insurance life cover premium may have:
- An annual inflation aligned increase, such as inflation over the last 6 months plus 3%, or
- A fixed increase such as 5% each year, or
- An age-related premium increase, such as R25 at age 25 and R35 at age 40, or
- A flat premium with no change for the first two years of the policy.
Premiums may also increase when 1Life Insurance reviews all premiums in line with changes in risk, such as if there is an epidemic and life expectancy changes significantly.
1Life Insurance will advise in advance of any premium increases so you can plan ahead and budget for the increased amount. Legislation requires that you receive notifications 31 days before the increase is due to take effect.
What this means for you and your policy: You need to know how and when your premium may increase. Your policy documents, that you can access on the online policyholder services portal or WhatsApp service centre, will have this information.
Grace period
Your policy includes a period of grace for unpaid premiums, provided that first premium payment has been received. If it has, and a subsequent monthly premium is not paid when it is due, you have a 31-day grace period to make up the payment. If you do not make up the payment, your cover will be suspended immediately and you won’t be able to claim. We will endeavour to keep you covered by attempting to collect the arrear premium amounts.
What this means for you and your policy: Make up any missed payments within the 31-day grace period or chat to your financial adviser or a skilled 1Life Insurance consultant if you are struggling to make payments so we can help you find a solution.
Premium loading
A loading is an extra amount added to your premium, either for health or occupation reasons. If you have a chronic health condition that means your risk of passing away earlier than the average life expectancy is high, insurers may offer you cover at a higher premium to take into account the higher risk. If your occupation is also high risk, insurers may load, or increase, the premium.
What this means for you and your policy: If you are a higher risk, you may still be able to qualify for insurance, although you will pay more for your cover.
Got any more premium questions?
Speak to your financial adviser or a skilled 1Life consultant, who can explain any premium terms and conditions you don’t understand.
Pay when due, plan ahead
Unpaid premiums can be a reason claims are declined, so make sure you know what your premium is, budget for it each month, and make up any missed premiums in the grace period of 31 days! You and your loved ones will enjoy cover and your family will appreciate your legacy of generational wealth.