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A Guide to Life Insurance for Your Parents (2021)
A Guide to Life Insurance for Your Parents (2021)
31 May 2021

As our parents get older, the more we realize that they will eventually rely on us. As many as 34% of South Africans are not only supporting their children but also have to take care of their parents.

Cover for your parents can be a much-needed safety net that can benefit you both in the long run, but how do you go about finding life insurance that will be a right fit for you and your parents? 

 

The benefits of life insurance

You may have heard that life insurance forms part of creating a financial safety net, but what are the benefits that come with it and are there any that can be used while you are still living? 

 

Life cover is created to grow with you whether you are just starting out or at a stage where you want to take care of your parents. The benefits that come with it are: 

 

Taking care of daily living expenses

Paying off medical bills

Paying off debt

Handling funeral expenses

Renovating a home

Paying off your mortgage

 

The payout can be used in any way your loved ones deem fit. You can also draft a will if you want to have more control over how your life cover payout is used. There are smart benefits that come with life insurance that can be used while you are still living so that your family won't have to worry about financial expenses, especially if you are the breadwinner. 

 

Why should you consider cover for your parents?

Less than 10% of South Africans have put aside enough money to see them through retirement and only 6% can claim that they have enough to retire comfortably. The expectation of supporting parents is slowly increasing with more people having to make room to take care of their parent's financial expenses. 

 

The peace of mind knowing that you and your parents will be taken care of financially, even in death, is priceless. You have the option of including them as beneficiaries on your policy or encouraging them to take out policies under their name. 

 

However, it is important to consider who will be paying for the premiums. Furthermore, they are under no obligation to list you as a beneficiary should they decide to take out their own policy. 

 

What if they have a pre-existing medical condition?

The older we get the more likely it is for us to contract illnesses that affect our lives. Having a medical condition that affects your life is known as a pre-existing medical condition. Life insurers do cover pre-existing medical conditions depending on the severity of it.

 

However, being honest about any medical conditions while taking out cover is crucial. Not being honest can cause you to be guilty of non-disclosure, which can be grounds for an insurer to cancel a policy or deny a policy when it comes to the claim stage. 

Be aware of the age limit

When looking for a life cover that will adequately cover your parents, keep in mind that South African insurers have an age limit. Most insurers limit the age to 65 years. It is still possible for you to take out cover at the age of 40,50 or even 64 but your premiums could be significantly higher due to the level of risk that comes with being this age. It will be difficult to take out a policy after your parents have passed the age of 65 years because of the higher risk that comes with illnesses that could put their lives at risk or passing away after a short period.

 

How to know if a cover is the right fit

Finding the right cover boils down to knowing what questions to ask and what features to look out for. You can also use a life insurance calculator to get an estimate on how much life cover is enough for you and your loved ones. Remember that the benefits will make or break whether it will be worth having. Always remember to carefully read the exclusions to avoid any confusion and frustration later. 

 

Things to do before you take out a policy

Have an honest discussion with your parents regarding life insurance. Make sure that everyone is on the same page when it comes to who will be paying for the cover, whether both parents will be taking out a policy under their name or if you will be taking out a policy on their behalf and paying for it. Speaking to an accredited financial advisor can help you find a financially sustainable option.

Need more information on MiWayLife? Read about our life insurance product, or get a life insurance quote in 30 seconds. Alternatively, call us on 0860 64 54 33 .
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Terms and conditions apply. Eligibility, cover and benefits are determined on individual risk profile. MiWayLife is an authorised FSP (No. 45741) and its product offering is underwritten by Sanlam Life Insurance Limited, a registered long-term insurer. MiWayLife is a division of Sanlam Life Insurance Limited - Reg No. 1998/021121/06