New homeowners and life cover problems . File picture
February, the month of love is an annual opportunity for couples to celebrate their commitment. Where romance has dimmed in the busyness of life, this time also offers a chance to reignite the spark with lavish expressions of devotion like chocolate, perfume, love letters, and even life cover.
According to Queen Malobane, provincial general manager at Metropolitan, anyone caught off guard by that last item on the list of gifts doesn’t fully understand the benefits of life cover.
“Chocolates melt and perfume fades, but life cover ensures that, even after the loss of a loved one, their surviving partner, family, or children are financially protected.”
Here are five reasons why life cover is a gift that will continue to give:
1. Life cover is yours to have and to hold
Malobane explains that life cover is legally protected from estate duty and debtors. “Estate duty – a 20% tax levied on a deceased person’s combined value of assets exceeding R3.5 million – does not apply to life cover payouts. This means that the payout is not subject to estate claims and goes directly to your nominated beneficiary, making it entirely theirs.
“The same applies if your spouse passes away with outstanding debt – creditors cannot claim their life cover payout. For richer or poorer, the life cover belongs to you, provided you are the beneficiary,” she adds.
2. Life cover is set in stone
Life cover benefits do not automatically go to your spouse or estate. Rather, they go directly to your chosen beneficiaries “Marriage or the evidence of a relationship doesn’t guarantee the benefit will go to your partner. You have to clearly stipulate your beneficiary,” says Malobane.
To avoid complications, it's important to regularly update your beneficiary nomination and consider appointing a backup beneficiary. If your primary beneficiary passes before you do, it’s important that you update your policy. If the beneficiary or beneficiaries are not nominated, the life cover will automatically fall as part of your estate.
3. Life cover can be shared
In South Africa, customary and Islamic polygamous marriages are legally recognised. These are marriages where an individual has more than one spouse. For this reason, up to three spousal beneficiaries can be stipulated on a Metropolitan life cover policy with the benefit divided as a percentage.
“This division ensures that all nominated spouses are fairly considered, avoiding potential disputes while respecting cultural practices,” says Malobane. “It’s a practical solution that ensures life cover serves its purpose – to provide financial support where it’s needed most.”
4. Life cover supports your child’s education
If you or your spouse pass away, life cover can secure your children’s education by covering costs like tuition, textbooks, and residence fees. “To do this effectively, you would need to work with an adviser who will calculate the benefit based on your children’s ages and the type of education you wish to provide.”
5. Life cover eases financial burdens
While nobody wants to imagine life without their partner, life cover ensures you won’t be left to shoulder the financial burden alone. It preserves the quality of a lifestyle built as a couple and offers a small consolation during a time that should be devoted to grieving an immense loss.
Metropolitan also allows beneficiaries to claim an immediate benefit of 20% of the life cover amount within a limit of R50 000 that’s paid in under 48 hours. This benefit can be used to cover funeral or other expenses that may arise as a result of an unforeseen loss.
“This month of love, let life cover reflect your enduring love by providing lasting security for those you care about most. Ensure a brighter future for your family and contact Metropolitan to talk to an adviser about setting up or updating your life cover, today,” Malobane says.
PERSONAL FINANCE