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Taking out life or funeral cover is one of the smartest financial decisions you can make. But owning a policy also comes with a few important responsibilities. Simple mistakes, such as missing a premium, forgetting to update your beneficiary or not understanding an exclusion, could create unnecessary complications when the time comes to claim. The good news is that these are all easy to avoid. Here are five things smart policyholders do to ensure their policies are there for loved ones when they’re needed most.
1. They make sure their premiums are paid on time
Premiums need to be paid when they are due. If a premium is missed and not paid during the 31-day grace period, your cover willbe suspended and your policy may lapse or be cancelled. This could result in a claim being rejected. Include your premiums in your monthly budget and make paying them a priority.
2. They take action if their cover is unaffordable
Smart policyholders don't simply stop paying premiums or cancel their policies when they are struggling to afford their premiums.
In many cases, reducing your cover amount can lower your monthly premium while still giving your family valuable financial protection. Remember, some cover is almost always better than no cover at all. As your financial situation improves, you can review your cover again and increase it if appropriate (on certain products re-underwriting may apply when increasing your cover).
Taking action early gives you more options and can help prevent your policy from lapsing.
Speak to your financial adviser or one of our consultants if your policies have become unaffordable. We are here to help!
3. They nominate the right beneficiaries
Choosing the right beneficiary is one of the most important decisions you will make when taking out life or funeral cover. This is the person who will receive the policy pay-out after your death and use the funds for the purpose you intended, whether that is covering your funeral expenses or providing ongoing financial support for your loved ones. Suitable beneficiaries include a spouse, partner or close relative who is responsible, trustworthy and has a good track record of managing money.
A common mistake is nominating a minor as a beneficiary because they cannot legally receive a policy pay-out directly. Unless you have established a trust to manage the money on the child’s behalf, the benefit may be paid into the Guardian's Fund until the child reaches adulthood.
Top tip: You can update your beneficiary details on the online policyholder portal, the WhatsApp service centre or by requesting a callback from one of our skilled consultants. Remember to check that your beneficiary's full name, ID number and contact details are correct.
4. They are honest when they apply for life cover
Applying for life insurance or increasing your sum assured involves answering questions about your health, lifestyle and medical history. Always answer these questions honestly and disclose all the information requested.
Providing false or incomplete information, or deliberately withholding important information, could affect a future claim and even result in a claim being declined.
If you realise that any information you provided when you applied for cover or increased your sum assured may be incorrect or incomplete, contact 1Life Insurance or your financial adviser as soon as possible to discuss your concerns. Correcting any errors before you need to claim can help avoid delays or complications for your loved ones in the future. It's also a good idea to read your policy documents carefully after your policy is issued or updated to make sure all the information is accurate.
5. They understand their policy exclusions
1Life Insurance policies generally exclude claims arising from suicide during the first 24 months for life cover and 12 months for funeral insurance, illegal activities, self-harm and driving under the influence of alcohol or drugs. Refer to your policy schedule and policy book for full list of general and specific exclusions applicable to your cover benefits.
Some policyholders may also have specific exclusions that apply only to their policy. For example, an exclusion may apply if you regularly participate in a hazardous activity such as skydiving. If a specific exclusion applies to your policy, it will be listed in your policy schedule. Take the time to understand any exclusions that apply to your policy so you know exactly what is and isn't covered.
Read our blog on policy exclusions to learn more about how exclusions work and how to check whether any apply to your policy.
Use the tips in this guide as a simple policy health check. Taking action today can help ensure there are no surprises if you or your family ever need to claim. If you have any questions or concerns about your policy, speak to your financial adviser or one of your trusted 1Life Insurance consultants. They can help you understand your cover, update your policy where needed and answer any questions you may have.