Life Insurance - Insurance for Life South Africa

Life insurance as a long-term insurance policy as it covers the life of the policyholder. Life cover pays out in the event that the policyholder dies, becomes disabled or contracts a critical illness. It pays out money to the nominated beneficiaries on the cover for their living expenses and debt of the insured. Not all life insurance policies cover the insured life past retirement age as the risk to the insurance company is too high. Many life insurance policies either terminate when the insured reaches a certain age, or convert into annuities (annual payments).

Life insurance is similar to life assurance in that it pays out for the abovementioned perils, but may not necessarily pay out at all. That is, life assurance is called assurance because the payout is assured, or the life cover does not expire. Life assurance is more expensive than life insurance as the insurance company is guaranteed to pay out (unless certain obligations stipulated in the policy are not met). It is compulsory for owners of a financed home to take out life insurance to protect the interest of the financier.