According to a study by Statistics South Africa released in 2015, most South African households were run by single mothers and only 31% of mothers said they were married. Single moms have to make important financial decisions such as which debts to enter into, how much to save for their children’s education, and how to manage daily expenses to ensure they remain financially stable.
“When it comes to financial products such as insurance, single mothers do not necessarily need every type of cover on the market,” says Derek Wilson, head of SA’s leading insurance and financial services website, Hippo.co.za, “Life Insurance is particularly important as it provides your dependents with financial security in the case of an eventuality, be it paying off your debt and/or bond, making allowance for tertiary education or simply ensuring that they will have an income to cover living expenses.”
Here are some things to consider before you buy or review your Life Insurance cover:
- Choose the right cover for you. You can opt for cover that lasts a lifetime and has a guaranteed payout benefit you can cash-in at any time, select a cover that runs for only a specified term (for example 10, 15 or 20 years to cover your bond), or cover only your debt such as credit cards, loans and vehicle finance.
- Don’t get more cover than you need. If you wish to cover your family for the loss of income, it is recommended to get coverage equal to 15 times your current salary. If you would like to cover your debt, add up all your financial obligations to ensure you have adequate debt coverage for the total amount.
- The sooner the better. Getting Life Insurance at an earlier stage in life will be less costly than taking out cover when you are older. The sooner you start, the more you could save over time.
- Get good health benefits. Some insurers would provide you with a better rate if you live a healthier lifestyle. Get your family to join in on living healthier and you could save on monthly Life Insurance costs.
- Compare cover. Do not simply go with an insurer that shouts the loudest. Compare from a range of different providers to get the best deal. You could save time and hassle by doing an online quote.
Hippo.co.za offers an online comparison service, where you are able to compare quotes and benefits from a range of South African Life Insurance providers such as First for Women, 1Life, ABSA, Alexander Forbes, Auto & General, Budget, Dial Direct, and Different Life. ,” concludes Wilson.