Can I have more than one life insurance policy?
Danelle van Heerde, head: advice processes and tools at Sanlam Personal Finance, responds:
Depending on your own specific requirements and existing financial situation, one or more life cover solutions could be used to meet your total needs.
For example, a person could use the life cover provided by an employer pension scheme, and additional cover on a life policy and a funeral policy to meet the different aspects of their life cover needs.
What is life cover and why is it important?
Life cover is probably the most intangible of all insurance products. Most people find it difficult to accept and understand the advantage of paying for something which doesn’t offer any immediate benefit.
But think about it for a second and consider the implications: what will happen if you die tomorrow? Who will pay your outstanding debts?
Who will take care of your parents, or your spouse and children, not just in the short term, but in the years to come?
How will your family manage without your monthly income?
If you have an active bond, will your family be able to keep the property, or will they end up without a roof over their heads in their time of bereavement?
Will there be enough cash to cover expenses like the funeral, executor’s fees and estate duty?
If you have a mortgage, car debt, are responsible for young children or have a stake in a business, taking out life cover can help ensure that your loved ones and/or dependants are not crippled by your financial obligations, and that they can settle your debt and maintain their existing lifestyle.
Asking a financial adviser to help you with a comprehensive financial analysis will give you a good idea of how much cover you need, and the most appropriate solutions.
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
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