The Cost Of Life Insurance Explained

Life insurance is considered by many people to be an important part of financial planning, and one of the most common questions from people looking to secure life cover is:

How much does it cost?

The answer isn’t a “one-size-fits-all”. Your premium depends on factors like your age, health, lifestyle, smoking habit, and how much life cover you choose. Life insurance policies can range from straightforward, affordable monthly premiums to more comprehensive insurance. An example would be if you take out a diabetes life plan, an HIV life plan or a standard life plan with AllLife you can add disability cover for an additional fee. 

There are life cover options available for everyone, including people living with chronic conditions such as cancer, hypertension, auto-immune diseases and heart conditions. 

What influences the cost of life insurance?

It’s important to understand what insurers look at when calculating your premium:

• Age: Younger applicants typically pay lower premiums
• Health status: Existing chronic conditions influence pricing compared to a healthy individual, but they can still qualify for life insurance
• Lifestyle: Smoking, alcohol use, and activity levels also play a role in pricing
• Cover amount: Higher cover (e.g. R10 million) means higher premiums

Calculating life insurance costs for healthy individuals

If you’re young and in good health with no pre-existing conditions, you may qualify for more competitive Life insurance premiums because you will be assessed as a low-risk profile. It’s good to know that you do not have to be super-fit or walk at least 10 000 steps every day to be considered low risk.

Life insurance could be more affordable than you expect, especially if you start early. Taking out life cover while you’re healthy may help you to access more competitive premiums.  With the standard life plan from AllLife, if you are young and healthy, you could pay only a few hundred rand per month. Talk to one of AllLife’s experts for a quote tailored for you.

Do you pay more if you’re living with HIV or diabetes?

For many years, people living with HIV or diabetes struggled to access life insurance or were declined entirely. However, AllLife recognised the need and was among the first providers in South Africa to offer life insurance designed for people managing these conditions.

What this means for you:

• You can qualify for up to R10 million in cover
• Included would be an immediate cash payout for funeral expenses.
• They will support you with their Health Monitoring Programme

How you manage your health would be beneficial when you apply for the HIV life plan or the diabetes life plan from AllLife. 

The key is that life insurance is no longer out of reach, regardless of your health, with the Chronic Life Plan from AllLife.  For more information, leave your details, and AllLife will call you.

Additional value from your life insurance at no extra cost

AllLife has taken it one step further, ensuring you get even more value from your life insurance by including benefits that you and your family can utilise while you are living. If you take out standard life insurance, or HIV or diabetes life insurance with them, you also get:

• A cash payout when you become terminally ill
• Private emergency ambulance services
• A 24/7 medical advice and trauma helpline.

All this is included for new life insurance policyholders. 

Life insurance that offers peace of mind.

While cost is important, the real value of life insurance lies in what it provides:

• Financial security for your loved ones
• Immediate cash for urgent needs such as funeral costs
• Settling debt and providing relief for living expenses
• Added value that you can use while you are living on specified policies with AllLife.

In many cases, life insurance payouts to nominated beneficiaries are not subject to income tax, although estate duty or other tax implications may apply depending on individual circumstances. Although there are no tax benefits during your lifetime, your loved ones will receive the full payout amount of the insurance policy value at the time, subject to applicable tax laws and estate considerations. However, tax rules change constantly, so you should always consult a qualified tax practitioner for advice on personal tax liabilities.

When you consider the long-term impact, many life policyholders view the monthly premium as worthwhile for the financial protection provided, plus all the inclusive benefits you will have with a life cover policy from AllLife.  

Get a Quote Today

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This article is for informational purposes only and does not constitute financial, tax, or insurance advice. Individuals should consider their personal circumstances before taking out any financial product.

AllLife (Pty) Ltd is an Authorised Financial Services Provider, FSP No 4946. Insured by OMART, a Licensed Life Insurer.

Source:

TaxTim: How Does Tax Work on a Life Insurance Policy in South Africa, 5 October 2023