How does age affect your life cover?
South Africa has a number of companies that provide life cover to people. Worth mentioning is that when applying for a life cover, these companies take into consideration a number of factors out of any form of insurance. When it comes to life insurance, for example, insurers take into account your age, health, whether or not you smoke and your height and weight, among other things.
Also, if you live a risk free life (i.e. no extreme sports and excessive smoking or alcohol consumption) you are a lower risk at a younger age, as theoretically you have more of your life ahead of you and essentially should have fewer health problems.
There are companies that give you quotes from different life insurance companies to see how the differences in our ages, health and situation would affect our insurance.
Some insurers offer a cashback option; however, this may see your insurance premiums increase. For example, Applicant A’s monthly premium under Hollard Life Insurance would increase from R540.34 to R610.58 if she opted for the cashback option.
In addition, some of the life insurance products automatically include things such as a funeral benefit or disability cover.
Overall, it appears that across the four insurance companies, Hollard charges the highest monthly premium. However, this could be based on additional benefits that you receive as standard with your policy that you may be charged an additional fee for at the other insurers.
Who will pay the cheapest premium?
Based on the available quotations, it would appear that a female in her mid to late twenties will receive a cheaper premium for R1 million life cover, than someone in their early twenties or in their thirties.
Surprisingly, as the youngest applicant (and having no known health issues that could have impacted her life insurance quotation), Applicant D received quotes for higher monthly premiums than Applicant A, and in some instances Applicant C. Only for Hollard Life Insurance was Applicant D offered a lower monthly premium than Applicant B. So while you may have fewer health issues at a younger age, it appears you are still deemed a higher risk by the insurance companies in other ways. And as life insurers don’t impart with their all of their underwriting methodologies, we’ll never find out the real reason as to why they may charge more in some instances and less in others.
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