If one of the reasons that you haven't yet bought life insurance is because of the assumption that it is expensive, you will be surprised. But how much will life cover cost you in South Africa?
How much does life insurance cost?
Many factors can determine the cost of life insurance, such as the insurer, your age, health, and other underwriting factors for each individual. For example, MiWayLife offers life cover starting at R500,000 to R5 million with a starting premium of R149*, which is the equivalent of buying a pizza!
How are life insurance premiums calculated?
Life insurance premiums are calculated specifically for each individual. When you apply for life insurance, underwriters assess your risk factors and use this information to calculate the appropriate premium for your sum assured. If there is a high risk that a life assured will die sooner than expected, there may be a loading, which means the monthly premium is higher than a standard rate premium.
Factors that can affect what you end up paying
Knowing what affects your premium in advance can give you leverage on choosing an insurer that will offer you all the bells and whistles at an affordable premium. It can also help you work on some of your lifestyle choices that can increase your premiums. Some of these factors that influence what you end up having to pay are:
Your age. A rule of thumb when it comes to purchasing life cover is; to take it out when you are young. You are healthier and less of a risk making premiums affordable.
Your weight. Did you know that your weight can put you at risk of becoming ill or developing life-threatening diseases? Insurers look at your weight in proportion to your height to determine if you are healthy. You can use our BMI calculator to find out your BMI.
Smoking status. Non-smokers tend to live longer than smokers since cigarettes tend to put a smoker's life at risk. The difference between premiums for a smoker and non-smoker can be as much as 50%. Making a change in your lifestyle choices such as quitting smoking can help you save on your premiums.
Occupation. Insurers will not cover certain occupations due to the high risk they pose to your life. The higher the risk a job poses to your life, the likely it is that you will be paying more.
Medical history. You will be asked to provide your medical history or conditions during the underwriting process. It helps insurers determine how much cover you will need to adequately cover your needs.
In the end, what matters is what a policy has to offer you and your family. Knowing if it provides a financial safety net can bring peace of mind knowing that no matter what happens, you are covered.