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Traditionally, the only risk cover which covered the ‘whole of life’ was life insurance. Products such as dread disease, disability and income protection were usually ‘term policies’ – cover typically ended after a certain term, often retirement. However, over the past few years, insurance companies have developed risk products for the whole of life – providing cover for unforeseen events both before and after retirement. They remain in force for an individual’s entire lifetime, provided the premiums are paid. These include:

  • Comprehensive dread disease benefits. With the newest products, individuals can choose either a term policy (which provides cover up to the age of 65) or a policy for the whole of life, which will pay out a lump sum if you suffer from a defined list of diseases. “You can therefore benefit from this product throughout your working life, seamlessly continuing into retirement – as opposed to a frail care insurance product which many only benefit you at some time in the future,” Marx says.
  • Whole life physical impairment benefits. These policies include whole life cover for a defined list of physical impairments – such as loss of function or amputation of limbs, permanent confinement to a bed or wheelchair, vision and hearing loss, or hip, knee, shoulder or ankle replacement.
  • Disability and whole life impairment benefits. In the past, disability policies covered an individual up to the age of 65, whereas the industry standard is now 70. In addition, clients are now offered physical impairment cover for the whole of life. “This type of combined benefit is geared toward protecting individuals in their later years against impairments or events that can seriously impact their lifestyle, even when they are retired,” says Marx.
  • Whole life disability income protection benefits. These policies typically provide occupational cover up to age 70, and thereafter provide protection against living with a functional impairment in retirement. “Suffering from a functional impairment in retirement will put strain on your pension income and is therefore also in insurable event. It will pay out a monthly amount.”

Marx says risk insurance products covering the whole of life are slightly more expensive than term products. “However, if you start investing in these products when you are young, the price difference is almost negligible and the benefits are available at any stage of your life, both before and after retirement.

“It is also important to note that a whole life insurance policy is not a retirement plan. You still need to save to ensure you can afford an annuity appropriate to your financial needs. Instead, these products insure the factors that may unexpectedly put pressure on your monthly pension, giving you extra peace of mind.”

Marx says the need for a proper financial analysis and plan remains crucial. “A professional financial adviser will be able to take into account all your financial needs, and advise you on the best combination of insurance cover for each stage of life.”

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Sanlam Life Insurance is a licensed financial service provider.
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