Sailing and Planes

LIFE INSURANCE

We all like to believe we will live to old age. As a result of improved medicine and science, statistically people are living longer then ever before. Unfortunately, however many people do die young, leaving behind them the following:

Young spouses and wives who have to be looked        after. Examples are educations, weddings and vehicles.
Adult dependants, such as parents, who can no        longer provide for themselves.
Unpaid debts that have to be paid off.
A mortgage on a house. If this is unpaid the  family will       literally loose the roof over their  heads.
Businesses that rely on the deceased for a major part        of the income.
Estate duty is levied on the value of off all  your assets        left to anyone, other then your spouse. The  duty is        deferred until the  spouse’s death and then it becomes payable.  In South Africa the estate duty is  currently at  20% on estates valued in excess of  R3, 5million as outlined by SARS.

It is for this reason that people buy life insurance. In the event of premature death the insurance company will pay out the amount for which a person has insured their life.

For a 35 year old non-smoker, R1million life cover would cost about R150 per month. If you had to invest the premium amount into a bank account with interest, you would have to make about 6500 deposits! It is for this reason why life insurance is actually the best investment a person can make.

Life insurance and extreme sports
Life insurance companies like to insure people who are healthy. Extreme sportsmen on the other hand, may not be exactly what the insurers had in mind.

Life insurance companies tailor their premiums to the average person. Anyone that varies from this “average” increases the chances of the insurer having more payouts, and this equates to smaller profits. According to the majority of insurance companies, people that engage in extreme sports such as skydiving, aviation and motorsport dramatically vary from the average person.

There are 3 options available to the insurance companies:

1. Normal Premiums
This means that the premiums will not be affected by the sports participated in.

2. Loaded Premium
The insurer will take on the risk, but at a higher cost for the perceived higher risk.

3. Exclusions
This insurance company will not pay claims that results from extreme sports. This means that the beneficiaries, business partners or debtors will no get paid.

There are many insurance companies in South Africa and each of them has an individual way of accessing the risks of the different types of extreme sports.

Majority of sportsmen are no aware that their policies may carry exclusions. To make certain that you are fully covered, or for information on a comprehensive new policy, please contact Extreme Insurance.


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