What is insurance?
Insurance is there to pay someone when something happens. That “something” can be a family member’s death, losing your ability to work and earn an income, going to hospital, or something you own being stolen or lost. This payout gives you a safety net to help protect you from financial harm.
Types of insurers
If it has value, you can bet someone out there will insure it.
General insurers, sometimes called property and casualty insurers, are the guys who insure your stuff: your car, house, jewellery, etc. They also might offer you liability insurance for accidents, injuries, and damage to others or their belongings. So if you got into a car accident, for example, they’d pay for the other guy’s fancy sports car.
Health insurers, also called medical aid, are the guys who will pay your hospital or other medical bills. They sometimes have waiting periods for certain kinds of claims: for example, you might need to have been a member for a while before they’ll pay hospital bills related to childbirth. They won’t turn you away because of pre-existing conditions, but they can be expensive and also have a lot of rules about what they will and won’t pay for (depending on your plan).
Life Insurers are the guys who insure you against big life events like death, disability or serious illness. They usually exclude conditions that you already have when you start a policy, which is why it’s a good idea to get insurance when you’re young and healthy. This is the type of insurance Sanlam Indie sells.
Life insurers sometimes get a bad rap for creating complicated products with a lot of fine print. At Sanlam Indie, we’re trying to simplify life insurance so it’s easy to get, easy to understand and easy to update as your needs change. (How are we doing? 🤓)
Life insurance that pays YOU
Some types of life insurance pay out to YOU personally if you make a claim. For example, if you wanted to keep earning an income if you became disabled and couldn’t work any more, you might take out Income Protection. Or if you wanted to get a lump sum after getting very sick, you could take out Critical Illness Cover.
Life insurance that pays YOUR FAMILY
Some products, called “death benefits”, pay out to your loved ones after you die – either as a once-off lump sum, or as a monthly income.
The biggest difference between underwritten and funeral cover is underwritten insurance takes your medical history into account. With funeral cover, insurers will usually sell to everyone regardless of their medical history. Underwritten insurance will also pay out much more than funeral cover. There are lots of other differences you should know about before you decide what’s right for you. (Full disclosure: we reckon that, as a general rule, if you qualify for it, Life Cover is waaaaay better value for money.)
Take a look at this more in-depth series about insurance to learn more about insurance and how it works.