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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