If you don’t read the fine print, not only will this put you at risk of entering a fraudulent agreement, but it also can also cause trouble for your loved ones when it is time to place a claim. To help you navigate the process of purchasing life insurance, here are five tell-tale signs to know if your life cover is legit.

It should describe the legal aspects (T & C’s)

Signing a contract should be done with precaution. A legally binding contract has terms and conditions which you need to read carefully before signing your name on the dotted line.

When it comes to life insurance policies, it is considered to be legally binding since your insurer is promising to pay out your cover should you stick to your side of the agreement by meeting premiums.

This is where you will also find out what your insurer will cover to avoid any confusion during the claim process.

A clear description of what the product entails

Financial companies across South Africa are regulated by the Financial Service Board (FSB), which ensures that your rights as a client are protected under the Treating Customers Fairly act. The regulation was introduced to protect people who are entering the financial service product market for the first time and have little to no knowledge of it. 

A legitimate life cover explicitly explains what you are purchasing and how it will benefit you and your loved ones. Your insurer should explain this to you before you sign anything through a phone call and through a contract that is sent to you digitally or to your physical address. 

There should be a clear explanation on beneficiaries

Life cover is a financial safety net that protects you and your loved ones. You should be given an option to add or remove your beneficiaries, ie people who will benefit from your cover and make changes when required.

Most insurers will ask you if there is a beneficiary you would like to add to your cover so that the claim is paid out to them directly. It is at your own discretion. It is recommended to tell a trusted family member, friend, or having an executor to ensure that your life cover is processed and handed over to the beneficiaries you have listed. 

You should be taken through the underwriting process

You will be asked a range of questions regarding your health, gender, age, lifestyle and occupation which is also known as the underwriting process.

The reason why you are taken through an underwriting process by insurers is to assess how much life cover you will need. It also helps them give you the right premium that will make it possible for you to be adequately covered.

Not going through this process should raise red flags. Always remember that an insurer will never ask for your password to your bank account. Asking questions can also help you understand what is happening.

Documents should be sent to you as proof

Once things have been completed it is important that you receive documents from your insurer as proof. It is possible that an insurer will email this to you instead of post it to you, but it is important that you receive these. You can do a follow up, if you have not received your contract.