Complete guide to the best life cover in South Africa 2020

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  • Post last modified:Nov 7, 2020
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Buying a life cover is one of the best purchases that one can make during their lifetime. When getting a life cover one requires to have a great sense of attention to detail. This will entail doing your homework first before purchasing a life insurance policy.

Since people take life insurance cover for different reasons, an insurance cover will solely depend on your life insurance needs. The best way to start your search for the best cover that will suit your needs is by getting a pen and paper and writing down reasons on why you need a life insurance cover.

In some circumstances, a life insurance cover might be a necessity, especially when buying a house. A bank might require you to take a life insurance cover of the same value as the house you are buying.

However, before taking out a life insurance policy, you will need to make some considerations that they will help you understand what kind of insurance you need.

Before listing our top 10 life insurance covers in South Africa, we are going to list some of the things that you may need to do before purchasing a life insurance cover.

What you need to consider before purchasing a life insurance

Life insurance should not be just a ‘buy and grab’, but rather a strategic purchase. You need to be fully aware of what you are getting into first before signing a life insurance contract.

Let’s look at what you need to consider before purchasing a life insurance policy.

1. Affordability

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Affordability is one of the important considerations that you need to make when purchasing life insurance. You should be able to afford the life insurance premiums, so as to avoid having in arrears on your premiums.

Choosing a life insurance policy you don’t afford will only lead to a disaster in the long run. Failure to keep up with the policy instalments will lead to the cancellation of your policy. Reinstating a life insurance policy can be costly and even impossible if your health status changes.

Hence, it is important to make sure you choose a life insurance policy you can afford. Nowadays, it is easy to get a prediction of how much your premiums will cost before getting the actual quote through the use of the internet.

2. Understand your need for life insurance

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This is the first question you need to ask your self when buying a life cover. Why do I need a life insurance cover? Doing this will help you determine whether or not you truly need a life cover.

It may happen that you don’t need a life cover after all but rather a different type of insurance such as an income protection cover, critical illness cover and so forth.

Therefore, analyse your needs for a life insurance cover before applying for one. Whether you taking it for clearing liabilities or for creating a living income for your family, an analysis of your needs will help you know exactly how much cover you need.

You don’t want to find yourself underinsured or over-insured. Good thing is that most insurance covers keep up with inflation.

3. Make lifestyle changes

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Consider making lifestyle changes. Making lifestyle changes will help in reducing your premiums by a huge percentage. You can make lifestyle changes such as joining a gym and managing your weight.

If you are a smoker you need to consider quitting. In fact, smokers get to pay way more money on monthly premiums than non-smokers. Otherwise, if you don’t make such lifestyle changes you will have to dig deeper into your pockets.

Insurance companies tend to charge more on premiums for people with unhealthy lifestyles to encourage them to make positive changes. They do this so as to discourage their clients from living an unhealthy lifestyle as it can cause dread diseases, making such clients high-risk clients.

4. Understand the underwriting Leniency of your life insurer

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Usually, the underwriting Leniency depends on the life insurance cover that one chooses. In many cases the higher the sum insured the more complicated the underwriting process is.

Usually, life insurance policies of R5 million or more require a blood test and other medical examinations. However, this is subject to the insurer you are purchasing the life insurance from.

If the underwriting process is lenient you may end up having to pay less in premiums than you would in normal circumstances. It’s always good to keep healthy when you have life insurance.

5. Understanding the contract

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Before signing a life insurance contract you need to first read and understand the blueprint. Know all benefits in full because the future of your loved ones might depend on it.

You need to know what the insurer doesn’t cover and covers. Know which death causes the insurer doesn’t cover. Also, know the waiting period for claims.

Death by suicide and accidental death usually have a longer waiting period, with suicide having a waiting period of 2 years. You can ask an advisor from a life insurance company to clarify all the insurance details for you. The goal is to understand everything that is on the contract, before signing.

6. Living benefits

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Living benefits are the benefits the insurer allows you to have on your life insurance policy while you are still alive.

When shopping for a life insurance policy look for living benefits that come with the life cover. Some of the living benefits include cashback on premiums, payments when diagnosed with chronic illness and decreased premiums for a good lifestyle.

7. Payout

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Knowing how the payout process works when a claim is made is of utmost importance. Know how long it will take for the policy to make a payout because this will help you understand how safe your assets or family will be secured by the policy.

For example, failure to repay a certain amount on a mortgage may lead to a property auction. This can all be avoided if you can know how long the payout process takes and plan around the mortgage payments.

Moreover, find out if there is also a funeral benefit. Insurers pay a sum of, usually R50,000.00 to cover funeral costs within 48 hours of making a claim.

With a Funeral benefit already available, you will not need a funeral cover. Saving you in premiums.

Now that you know which considerations to make before choosing a life insurance plan, you then need to decide on the right life insurer.

Keep in mind that there is no yardstick to measure which life insurer is the best. However, we have made some considerations and made our list based on the most important factors that we think make up a good life insurer.

Our list is compiled based on affordability, living benefits, underwriting Leniency, conversion features, and funeral cover benefit. In no particular order, we have listed our top 10 life insurance providers in South Africa below.

Top 10 life insurers in South Africa

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1. OUTsurance life Insurance

OUTsurance is one of the biggest life insurance companies in South Africa and comes with incredible underwriting. With the OUTsurance life insurance, you have an opportunity of getting a life cover between R200,000.00 – R16 Million.

Furthermore, you get cashback on your premiums every 10 years. That is if you make sure you don’t skip your premiums. Nevertheless, the benefits are encouraging.

Other benefits that come with the OUTsurance life cover include fixed premiums for 5 years, terminal illness benefit of up to R1 million and funeral benefit.

2. Absa life cover

Absa life cover comes with some of the lowest life insurance premiums, especially for Absa clients. The life cover has a terminal illness benefit that pays out cash if you are expected to live for less than 12 months.

The maximum cover that you can get from Absa is R6 Million. Another benefit that comes with the Absa life cover plan is the cashback feature. Absa pays 20% cashback of your premiums every 10 years.

3. Old Mutual Life Insurance

Old Mutual is one of the oldest life insurance providers in South Africa. With such experience when it comes to delivering exceptional insurance products to the South African public, you can only expect great things from Old Mutual.

The Old Mutual Life Insurance comes with benefits fit for any type of life insurance seeker. This cover comes with a Funeral benefit that pays up to R50,000.00 to the beneficiaries within 48 hours of making a claim.

4. Metropolitan Life cover

Metropolitan comprehensive life cover is a forward-thinking product. The cover has a funeral benefit and it is easy to distinguish from the rest. What makes the funeral benefit special is that it pays 20% of the cover within 48 hours of making a claim.

Metropolitan offers a maximum cover of up to R5 Million and you can use the money however you want. The insurance provider pays out 100% of your cover if you are diagnosed with a terminal illness and you are expected to live for 12 months only.

You can also choose to bundle your cover and include some benefits such as an optional monthly payout of up to 60 months to support your family and/or add additional premiums to keep up with inflation.

5. FNB Life insurance

FNB is rated by SA-CSI as the life insurance provider with the most satisfied customers in the life insurance category. Achieving this feat means that FNB life is doing something different than the other insurers.

FNB Life Insurance policy comes with a funeral benefit of R30 000 at no additional premium. For FNB Banking clients the benefits are even more if you are a private banking client you can have your premiums reduced.

6. Discovery life insurance

Discovery life offers discounted premiums for Discovery products holders. These products may include the Discovery bank account, Discovery medical aid and/or other types of Discovery insurance products.

Discovery life encourages its members to keep in shape and rewards them for doing so. Discovery clients get both life cover benefits and health benefits The insurance provider announced that their clients live an average of up to 87 years, hence showing the efficiency of their healthy lifestyle program.

7. Assupol Life Insurance

Assupol Life Insurance comes with a Funeral cover for you and your spouse depending on the plan you choose. The premiums increase on a year to year basis as well as the cover amount to keep up with the inflation.

The life insurance comes with underwriting only for HIV positive clients on its flagship plan.

8. Sanlam Life Insurance

Sanlam Life Insurance is suitable for every type of life insurance buyer. There are 3 plans that one can choose from. One of the plans offers a funeral cover benefit of R50,000.00.

9. 1Life Insurance

1life insurance offer life insurance solutions that are adaptive. As a member of 1life, you can convert your life insurance to the one that suits you at different intervals without compromising much

You get fixed premiums, no medical check-ups and a funeral benefit. Premiums are first for the first 24 months.

10. Liberty Life Insurance

Liberty Life Insurance comes with a number of benefits. When terminally ill you can choose to receive all of your life cover amount while still alive. The life insurance come with normal underwriting so premiums will depend on your underwriting results.

Conclusion

A life insurance cover policy is one of the most important policies that you can take. Ensuring that you get a life insurance cover that best fits your needs can be a great challenge. Taking the above-listed considerations you can get a cover that works for you and your family.

Try paying attention to detail before signing a life insurance contract. Preferably use an insurer that you can trust and has a great track record when it comes to paying out claims such as the ones we have listed for you.

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Lethabo Ntsoane

Lethabo Ntsoane is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in reviews and financial tips.