What influences the cost of life insurance?

Jun 01, 2018
Author: Ean Barnard

We recently launched two new financial products on the Fincheck platform! This is really exciting because we can now help people make better financial decisions over a wider selection of finanncial products. We're going to start with a Life Insurance education series and follow that with a Funeral Insurance education series.

Help us to spread the helpful information to South Africans by sharing this article with your friends! Let's look at the cost factors that influence Life Insurance!

P.S. Apply for Life Insurance products here and compare according to your needs!

What influences the cost of your Life Insurance and how much do you need?

As with all insurance products, risk is the primary culprit in determining the cost of your premium.

The monthly cost of your life cover premium can be influenced by:

  • Your age (younger ages are typically less expensive)
  • Your health (being healthier is cheaper)
  • Harmful habits (like smoking, drinking and other drug uses)
  • Profession (high-risk work increases your premium)
  • Lifestyle (high-risk activities like extreme sports will count against you)
  • Who it needs to cover

In some cases, a medical exam might be required by your life cover service provider to determine some of the above. Remember that lying about any of the above can severely damage the changes of your life cover paying out or cause a long delay in the funds being released.

So, how much is enough?

Many people board the gravy train of greed when choosing the cover amount and unfortunately pay the crippling monthly premium for that. As with all things finance, budget and cash flow should be front of mind.

Remember, the idea of life cover is to provide for your family if something happens to you. Therefore, you need to look at the costs of your lifestyle and use to navigate the amount of cover you need. Keep the following living expenses in mind when choosing life cover:

Fixed monthly expenses (bond repayments, cars, school fees, medical expenses etc.) Household expenses (food, utilities, etc.) Future expenses (future lifestyle quality, big life events, education, bigger family)

Once you have an idea of your annual expenses over a certain timeframe, it's time to see what premium (including its benefits) fits your monthly budget. Start with the basics that will equip your family to continue life without and other benefits as you go along.

We know the options for life insurance is vast and each person’s situation is different. So, we want to help you make the right choice. If you are looking for a life insurance partner, we encourage you to make use of our life insurance comparison page to apply & then compare the different life insurance partners and their basic options.

To your better financial future!

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