Many of us are going through financial hard times, retrenchments, debts, etc… As difficult as things are, I would suggest that you get professional review and advice before you cancel any of your policies. Below are just some of the key considerations before you cancel any policies;
1. Why did you take the policy in the first place? If it is life cover that you are thinking of cancelling, imagine what would happen to your family if you died without life cover. They might lose their home, the kids might not be able to finish their studies, etc… Maybe you should be thinking of reducing the premium or getting a comparative quote rather?
2. If you are thinking of cancelling funeral policies, you need to know the following about funeral policies
a. Funeral policies are generally more expensive as you get older so the policy might be more expensive at a later stage
b. What happens if you or your loved one dies and you have just cancelled the policy? This is how many people find themselves in high debt situations as they have to take personal loans to bury their loved ones
c. Stand-alone funeral policies are generally more expensive than those that are taken as part of life cover so maybe you should be looking for life cover that also has funeral policies for yourself and your family in a single policy?
d. Taking a funeral policy for each one of your family members can be very expensive, think of consolidating the policies into a single policy and paying a single premium
e. Be wary of funeral policies that come to an end when your children become adults i.e. when they reach age 21. Youth unemployment and unemployment is very high in this country so you want to cover your children even if they are over 21 years of age
f. Also be aware that most funeral policies come with Waiting Periods and you must understand what these are and what the implications are
3. Do you have Disability cover? Do you know what disability cover means? Are you aware that your disability cover comes to an end at retirement age? Do you know that your disability cover would not pay if you become disabled while you are unemployed? Does your employer also offer you disability cover? Do you know that part or all of your disability cover might not pay if you also have disability cover offered by your employer?
4. Read your policy documents and ensure that you do NOT have Accident cover. Many people think they have life cover and yet they have Accident cover. Accident cover would only pay if you die an accident
5. Does your life cover have an end date? What happens if you die after the end date? Why would you pay for life cover that might come to an end while you are still alive?
Next time, I will write about a shock I just discovered about Endowment policies and why you should rather use tax-free investments rather than Endowments
So if you have been thinking of cancelling your policies and you want someone who can review your policies for you and offer you advice and guidance as to how you could consolidate or reduce your premiums without compromising yourself, drop us an email at firstname.lastname@example.org or email@example.com, Ts & Cs apply