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Whole Life Insurance

Whole Life Insurance in its most basic form is a level premium policy that offers no cash values, in other words there are no savings element linked to the policy, and that only pays the amount of cover you have initially selected to your beneficiaries should you pass away.

It’s called a level premium because your premium will stay level and never go up unless you have asked to add cover growth in order for your premium to grow annually and then your cover amount will also go up.

Normally the insurer will raise your premium by say five percent every year and for that raise, your cover amount will increase by say three and a half percent.

Most insurers have different variations on these growth options and like with most things pertaining to Whole Life Insurance it is important to read the fine print in this regard.

While speaking about beneficiaries I would like to mention that this is a good way to save money, time and grieve for your family.

The reasons are once beneficiaries are nominated on your policy the insurer will pay the amount directly to your beneficiary without involving the executor of your estate.

This means the executor is not handling that money and can therefore not charge his fee on that money. By law the executor is allowed to charge a maximum of 3.99% (VAT inclusive) on the value of your estate.

If there was no beneficiary nominated on your policy, and let’s say the cover on your policy amounts to R1 000 000.00 the executor will charge an extra R39 900.00 (R1 000 000.00 X 3.99%) just on that policy alone.

Also, if the policy pays out directly to your estate it could take years for your family to receive that money because it is a very long process to wind up a deceased estate.

There are many other add-ons one can add to a Whole Life Policy and the industry calls these add-ons ‘Rider Benefits’. There are a lot of other terms and conditions to consider and that is why it is important you should speak to a qualified Financial Planner.

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Pillar Financial Services | Registered Financial Service Providers (FSP)
3rd Floor, Skyscrape Terrace, Cnr DJ Woodway & SeaView Str, Bellville, South-Africa, 7550
Tel: (021) 945-3354

Pillar Financial Services, is a licensed life insurance company in South Africa. The following financial service provider numbers are provided as required by law: Pillar Financial Services -FSP 35286. Pillar.co.za provides life insurance quotes based on the information provided by person looking for a life insurance quote.

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