Offering your child(ren) a world of protection also means having financial safety nets in place. Life cover is one of these safety nets, but is it a scary or necessary prospect? Here are a few things that you need to know.
Should you get life cover for your child?
Life cover is not only a financial safety net that protects your loved ones, but it is also a way to be prepared for life's unexpected moments. While any parent hopes that their child will remain healthy right into their adulthood, life can throw curveballs that can leave many parents feeling devastated.
Life cover for children offers the same benefits that adults receive, but the cover amount can be slightly lower depending on the insurer. It can offer financial protection should your child(ren) be diagnosed with a terminal illness.
Most covers allow you to use 50% - 100% of the cover amount to handle medical costs and other expenses so you can focus on spending more time with them during such difficult moments instead of stressing over the financial aspect, which can be difficult for many families. It is equally important for parents to have a cover of their own to provide the ultimate protection for their child.
The role of a will
South African life insurers understand that many families are unique. Therefore, most covers are tailor-made to suit a person's needs to ensure that you have an adequate safety net to protect your loved ones. This has also made it possible for people to cover loved ones, even in cases where they are not related to each other.
You have control over which beneficiaries you can add or remove when it comes to receiving the payout. If the list of beneficiaries is not kept up to date, it can lead to the payout not being claimed. Therefore, updating your life cover frequently is crucial. It is also important to have a will in place to legally secure who gets access to the payout should anything happen to you.
Having a will gives you control over the amount a person can receive and when they can receive it to avoid a situation where a beneficiary is manipulated into parting with what you have given them.
What about funeral cover?
Parents can also choose to take out funeral cover for their children to cover the costs of a funeral. But keep in mind that life insurers are legally obligated to cap their cover amounts for certain ages. For example, children under the age of 6 years old can be covered for R10,000 and children between 6 - 14 years old can receive a maximum cover of R30,000.
It is beneficial to have both funeral and life cover in place, which is why MiWayLife offers a built-in funeral policy that comes with your life insurance policy to make sure that you have a financial safety net for funeral costs and other living expenses beyond the funeral day.
