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Expert advice if you're struggling to pay your premiums

5 April 2024
5 minute read
family on couch looking over documents

You don’t have to cancel your life cover or funeral policy if the premiums have become unaffordable! There are ways to reduce your premium so that you can continue to safeguard your family’s financial future.

Your policy is a gift for your family

When you need to find extra funds in your budget and are considering cutting your insurance premiums, always keep in mind how important your funeral policy and/or life cover policy is for your family. Funeral cover covers immediate expenses, ensuring burial costs can be paid, giving family members a respectable funeral. Life cover, however, can secure your family's financial future. Cancel your cover and your family could face financial hardship when you pass away. Rather, look for ways to reduce the premiums so your family has some cover. Would you not rather leave them generational wealth instead of generational debt? There are solutions!

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Reduce your cover amount for more affordable insurance

One way to make funeral or life insurance more affordable is to reduce your cover amount, which will ensure your family still has some protection, and in turn will reduce your monthly premium.

Contact your financial adviser or skilled 1Life Insurance consultant who can review your cover and suggest a lower cover amount with a lower premium.

If you are smoker, quitting smoking could also see your life cover premiums reduced by as much as a third! Smokers pay more for life cover than non-smokers because the health risks are higher for smokers. Quit smoking, and life insurance could be cheaper!

Top tip: You can always increase cover when the budget allows! And, if you are a 1Life Pure Life Cover policyholder, you have a guaranteed assurability benefit that allows you to increase your cover on every third policy anniversary with no underwriting other than an HIV test, subject to policy terms and conditions.

If you cancel your policy and take out a new policy, your premiums could be higher as you will be older.  If you are taking out a new life cover policy, the policy will also have to be underwritten. Not only will you have to complete all the medical questions again, you will also need to take an HIV test. And if your health has changed, such as if you have a chronic condition, your premiums could be higher as your risk is higher.  It is cheaper, and easier, to change your cover amount on your existing policy than to cancel it and take out a new policy!

Even a little cover can go a long way

Reducing your premiums may leave your family with less cover than you would like, but even a small amount of cover will change lives.

What if you had funeral cover of R20 000 and life cover of R300 000? It might not be the R40 000 funeral cover and R750 000 life cover your family needs to pay for funeral costs and replace your income, but it is a lot better than nothing!

Your loved ones could use the R20 000 funeral cover to pay most of the funeral expenses. Without that R20 000, they may have to use savings or take on further debt to pay for the service and burial.

With the R300 000 life cover, they could pay off a vehicle loan, which would give them transport and reduce monthly expenses as there is no repayment amount! They could also put some towards reducing a large debt such as a home loan, which could also reduce monthly expenses. Or they could use R100 000 to pay for basic living expenses such as food, clothing and electricity for a year, and invest the R200 000.  Earning a 10% return they could have R220 000 after 12 months. R300 000 may not cover all the lost income, but with good financial advice, it can ensure your loved ones don’t fall into financial distress.

If you reduced cover from R2 million to R700 000, your family could invest R500 000, either in a business, or in an income earning opportunity such as a rental property. They could use the R200 000 to pay off any debts and pay for monthly living expenses. Cancel all your cover and even paying one month's expenses is impossible, not only leaving your family in financial distress, but also increasing their stress when they are mourning your loss. Your life cover pay-out, even if it is a small amount, can ensure that you give your family the opportunity to build generational wealth - and not leave them with generational debt!

Already missed a premium payment? Here’s what to do

Even if you feel you can afford your premiums, there may be months where you don't pay a premium, such as if there are unexpected expenses. If the missed payment is not made up, your policy will lapse.

Funeral and life cover premiums need to be paid monthly. There isn’t an option to skip a month, so if you miss a payment you need to make it up within a 31-day grace period.

1Life Insurance will notify you of the options you have to make up a payment if a premium has not been paid, in an SMS, or you can speak to one of our skilled consultants who can help with payment arrangements. You can find more information on missed payments and how to make them up in this blog.

Help is available to reinstate a lapsed policy

If you miss premium payments and don’t make them up in the grace period your policy may lapse, or be cancelled, and your family won’t be able to claim. If your policy has lapsed recently, there may be an option to reinstate it at a more affordable premium. 1Life Insurance’s skilled consultants can advise on if and how your policy can be reinstated.

Your insurance policy is flexible

There is no one-size fits all in insurance. Your policy can be tailored to meet your needs and your budget! You can change the cover and sum assured amounts if you need to, and make sure that your family still enjoys some cover. Even it is only a small amount, it can make a big difference!

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