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The Importance of a Life Insurance Policy and Disability Planning

Investing in a life insurance policy as well as disability insurance cover is one of the most important things you can do for your family.

Many people believe that having policies means that they are wastefully spending their money rather than investing it. However, policies like these are some of the most responsible ways to use your money.

Life Insurance Johannesburg Financial Planners

What is a Life Insurance Policy?

Life insurance is an agreement between you (the policy holder) and the insurer (insurance company) that allows you to make monthly instalments towards a total premium that will be paid out to your nominated beneficiary in the event of your death.

The Benefits of Life Insurance Policy

The following benefits of having life insurance:

Payment of Debt

The premium paid out to your beneficiaries can help them cover any debt that you may have left behind. This relieves them of the stress of trying to find the means necessary to settle your debt.

Furthermore, when debt cannot be paid, creditors may begin the process of repossessing your estate as a means to settle the debt, potentially leaving your family without a home or car. Life insurance can help prevent this from happening.

Final Expenses

In absence of a funeral plan, a life insurance policy can cover the costs related to your funeral. This will help your family focus on grieving, instead of how they will pay for a dignified memorial service.

Provides Income

If your family is financially dependent on you, your life insurance will make sure that they continue to receive a monthly salary which will help them pay for their day to day expenses as well as monthly bills.

Cover Estate Taxes

Inheritors of your estate are likely to pay estate tax on the assets they inherit from you. Your heirs may not be financially capable of paying these taxes. Your life insurance policy premium can assist the beneficiaries of your estate with covering the taxes related to their inheritance.


If you have children in your care who dream of attending university or other forms of tertiary education, your life policy can help them afford to do so in the event that you are no longer with them.

This puts your mind at ease, knowing that your children won’t be deprived of the opportunity to further their education, so that they may one day be financially independent.

Disability Insurance Definition

Disability insurance refers to the cover you will get from your policy in the event of serious injury or illness that renders you incapable of working.

Types of Disability Insurance

  • Disability income insurance – this can also be referred to as your income protection insurance. This type of disability planning pays you a set monthly salary if you are unable to work and earn a living due to illness or injury. Additionally, occupation disability insurance can help you replace or recover any income that you have lost due to your disability.
  • Disability lump sum cover – this type of insurance pays a lump sum that can be used to pay for any immediate expenses such as medical costs as well as upgrades that must be done to your home or vehicle to accommodate your disability. The amount of money remaining after covering all the once-off expenses can then be reinvested in such a way that it can provide you with monthly income going forward.

One of the biggest benefits of disability planning is that you can spend time on recovery, rehabilitation and physical therapy instead of worrying how you will pay for the costs related to your treatment.

Olemera – Financial Planning in Pretoria

Investing in a life insurance policy as well as paying attention to disability planning, you offer yourself and your family immeasurable peace of mind.

There are certain things such as death, injury and illness that cannot be avoided, so it’s becomes our responsibility to make sure our loved ones are taken care of when we become unable to.

For more information about life insurance and disability cover, or for assistance with choosing the right policy or plan for you, feel free to contact us and speak to one of our financial advisors today.

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