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Compare life insurance

Take care of those who depend on you financially.

We know price is important, but we don’t include costs in our direct life insurance comparison.

Fincheck Life Insurance

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What is life insurance?

Life insurance is a type of insurance that usually pays your dependants money if you die during the term of a policy. It can allow your partner or children to continue to meet the future costs of living, or pay off debts like a mortgage. It can bring you peace of mind that your family will be taken care of financially if you’re no longer around.

Life insurance is typically paid out as a tax-free lump sum or in monthly payments, depending on how the policy is set up.

There are also other types of life insurance that provide more financial security if you are injured or become too sick to work:

Do I need life insurance?

Whether or not you get life insurance could turn out to be one of the most important decisions you make in your life. Consider the financial strain that your family would suffer if you were suddenly no longer around to provide an income. And ask yourself:

  • Am I sure my dependants would be financially stable on their own in making certain payments, such as the mortgage or bills?
  • Would my children be able to go to college without a lump sum being paid to meet their future education needs?
  • Would my partner be financially stable enough to care for our children and stay in work?
  • Am I sure any death benefit I’d get from work would be enough to maintain my family’s standard of living for many years?
  • Would my family be able to pay others to do some of the tasks I do routinely, such as caring for an aging relative?
  • Would I want my family to pay for my debts or last expenses, which may include taxes and burial costs?

if you answered ‘no’ to any of these questions, you could find that life insurance offers your loved ones the support they need.

When should I get cover?

For many people, the moment that others become financially dependent on them is the trigger for taking out life cover. Significant life events that may lead a person to take out life insurance include:

  • Taking out a mortgage
  • Buying a new home
  • Birth of a child
  • Any time a family member depends on you to pay for their care

Life insurance tends to be more expensive as you get older, as you’re seen as more of a risk to an insurance provider. So, there’s no time like the present to shop around for a competitive premium that will meet the future needs of your family.

What are the main types of life insurance?

The core types of life insurance are:

  • Whole-of-life cover. This type of insurance offers you protection for your entire life. This means your insurer will pay-out after your death whenever it occurs. This type of life insurance is typically more expensive than term insurance because the insurer knows it’s going to have to pay out when you die.
  • Term insurance. This is a common form of life insurance which can be split into two types: level term and decreasing term. Level term offers a fixed amount of money, for a fixed period of time, that you’ve pre-chosen. Decreasing term also fixes the period of time (or, term) of a policy; however, the amount which is paid out decreases over time.

There are a number of other types of life insurance that you may want to consider. These include:

  • Credit life insurance. This is a type of life insurance that covers any outstanding debt on your accounts in the event of your death or disability. Many lenders will insist that you have this insurance as part of your life policy.
  • Critical Illness cover. If you’re diagnosed with a critical illness or injury that’s listed in your policy document, this policy add-on would let you claim a lump-sum payment that’s tax free. However, most insurance providers will usually only pay out once, so, if you receive a payout for critical illness, then your dependants would not receive another lump sum after your death.
  • Terminal illness benefit. If you’re diagnosed as terminally ill and are expected to pass away within 12 months, then this benefit entitles you to make a claim for your life insurance in advance. Terminal illness cover is often included within many life insurance policies. Some providers will pay out a life insurance policy early if you’re diagnosed with a terminal illness.

    More about whole of life cover

    There are different types of whole-of-life insurance policies, including:

    • Flexible whole of life. With this policy, part of your premium will be put into an investment fund. This means that the amount of money you receive will depend partly on how well your investment has performed. Your cover is usually reviewed every ten years, during which you can choose whether to increase or reduce your premiums and cover.
    • Non-profit whole of life. With this type of insurance, you’ll only be required to pay fixed premiums and there is no investment side to the policy. Your lump-sum payment is also usually fixed.

    MUST READ: Review your policy regularly

    Once you have cover in place, you should review your policy regularly to ensure you still have the right level of cover. Events that can affect your policy include:

    • Changes in your health
    • Marriage or divorce
    • Buying a new home
    • Children moving out, or becoming financially independent
    • Retirement

    Most experts recommend that you review your life insurance policy every 12 months.

    What features or optional add-ons should I look out for?

    Before you purchase life insurance, it’s worth considering what additional features you would like to add to your policy. If you become seriously ill or disabled and are unable to work, having a premium waiver means you can avoid some of your regular premium payments. If you’d like the chance to amend your policy, for example, transferring it from a fixed-term policy to a whole-of-life policy, then you should look out for a deal with a convertible term. Elsewhere a Renewable term policy gives you the option of renewing your policy without the need for a health review. Some insurers let you combine policies, sometimes offering multi-policy discounts if you take out cover for your spouse or child, or if you take out other types of personal insurance with their company. Be aware that adding such extras on to your policy will lead to an increase in your premiums.

    How can I save on my policy?

    There are a few ways that you could save on your life insurance policy, including:

    • Be healthier. Pre-existing medical conditions, smoking, excessive alcohol consumption and obesity can all drive up your premiums; smokers usually pay double compared to non-smokers. If you can show you are taking steps to improving your lifestyle then you could be rewarded with lower premiums.
    • Avoid getting too much cover. Consider your financial obligations and how long you are likely to need cover to work out the right amount of insurance. You may find that a cheaper policy with less features is still sufficient for your situation.
    • Review your cover each year. Assess what is already in place and see if you need to upgrade your insurance.
    • Compare your options. There are a number of insurance providers in the life insurance market in South Africa, so comparing a lot of options is a great way you could find savings on your policy.

    The overall cost of your policy will vary based on a range of factors. This includes the type of policy your choose and your cover level. Other factors that affect the price of a policy include your age, health, occupation and income. Keep in mind that price isn’t the only factor when it comes to life insurance. Getting the right cover in place is key, and therefore it’s a good idea to reach out to a financial expert if you need extra help understanding this area of insurance.

    What affects the cost of life insurance?

    Lots of different factors influence the cost of life insurance. That’s why it’s so important to get a personalised quote before deciding whether it’s right for you.

    Factor
    Impact
    Age
    Younger people will pay less for life insurance
    Biological sex
    In general, women pay less for life insurance but more for income protection
    Profession
    People with riskier jobs will pay more for life insurance
    Smoking
    Non-smokers will enjoy cheaper life insurance premiums
    Overall health
    People without pre-existing medical conditions may pay less
    Cover amount
    The higher the potential benefit, the higher the monthly premiums

    What are some of the key policy exclusions?

    Insurance providers have specific guidelines for when they will and won’t pay out. Make sure you read and fully understand a life insurance policy document before you sign up with a provider. Policies typically won’t pay out in the event of death caused by intoxication by drugs or alcohol, gross negligence or suicide.

    It’s important that you’re accurate and completely honest when you are completing an application for life insurance. An insurer will ask you to disclose personal details about yourself, including your medical history and your lifestyle. If you smoke, say so. By not doing so, you could end up invalidating your policy meaning your family won’t get a pay-out.

    How much life insurance should I get?

    That’s a tough question. You have to take lots of different factors into consideration when deciding how much life insurance you should get, such as the following:

    • How much cash savings you have
    • If you have passive income streams
    • What financial obligations you have
    • How many people are dependent on you
    • Your typical income and outgoings
    • How much is in your super fund
    • What other assets you have
    • Your level of household debt
    • How much help is available to you
    • How old you are

    What else should I be aware of?

    When you’re considering life insurance cover, you should take into account:

    • Any future costs. Think about your current bills and expenses, and take into account what these will look like in the future. For example, if you have young children, the cost of school and university is likely to be significant in future years, so make sure you allow for this when assessing what you can afford.
    • Qualification period. Insurers will set a period of time, called a qualification period (or moratorium), which is activated as soon as you buy a policy. You’ll have to survive this qualification period in order for the full agreed amount to be paid to your family (it’s often between one to two years).

    Frequently asked questions

    How much life insurance do I need?

    One rule of thumb is to get cover for about 10 times your annual income; another is to get enough to at least cover all your existing debt. But there are many factors to keep in mind when deciding the level of cover that’s right for you. If you’ve just taken out a mortgage or have young children, you may need to get a larger life insurance policy than someone who has paid off their house.

    How often do I need to pay my premiums?

    Most life insurance premiums are paid on a monthly basis until the end of the insured term, or until you decide you no longer want cover.

    Can I have more than one life insurance policy?

    Yes, but that doesn’t mean it’s a good idea. You will have to pay the ongoing costs of all your insurance policies, which can be very expensive. Also, an insurer will check your current insurance situation when you apply for a new policy and may refuse to cover you in the event you already have adequate cover.

    Can I amend my life insurance policy?

    This will depend on your provider and the type of policy you have. There may be times when you may be able to change the size or length of your life insurance policy, but this depends on your circumstances.

    Can I cancel my life insurance?

    Yes, you are generally free to cancel your life insurance policy at any time. However, once you cancel, you will no longer be covered, regardless of how long you had cover.

    How does my family make a claim for my life insurance?

    In the event of your death, your family will need to contact your life insurance provider to begin the claims process. They will generally need to complete a claim form. Once it has been approved, they will receive the pay-out.

    How do I know if my family member had life insurance?

    If your family member has died and you are unsure if they had life insurance, there are a number of ways you can find out. You can check their bank statements for any ongoing insurance payments, or check any documents they left behind. Some companies offer services that help identify unclaimed insurance policies, though you may need to pay a fee.

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