SA's No 1 Insurance Blog

What is irritating about old fashioned life insurance?

  • Is it the massive amount of paperwork?
  • Is it sitting with someone trying to convince you, you need more than anticipated? Or trying to sell you everything else on top of the life cover?
  • Is it the inconvenience of having to go through medicals, and then more medicals based on the previous medicals?

 Well, there is an alternative.

It’s known as direct life insurance, and there are a few companies which specialise in this. Off the top of my mind there’s:

  • 1LifeDirect
  • Instantlife
  • Outsurance, and
  • Hollard Life

Since I’ve just completed two articles on Hollard, let’s take a look at their life cover offer.
You can read about the Hollard Funeral Cover benefit and the Hollard Hospital Cash Back plan in my previous two articles.

How does life cover work at Hollard Life?

First things first, Hollard offers two types of life cover:

  • Life insurance up to R200,000 issued by the end of the phone call, and
  • Life insurance between R200,000 and R1,2 million

Life insurance up to R200,000

  • Hollard Life works on multiples of R10,000
  • With cover starting off at a minimum of R50,000 and going right up to R200,000.
  • R20,000 of this R200,000 can be paid as a funeral benefit within 48 hours of receiving the necessary paperwork

You can also take out life cover as part of the Hollard Funeral Plan but then it’s limited to R120,000. If you happen to have Hollard Life cover on various different products, then the overall cover is limited to R250,000.

To qualify:

  • you need to be at least 18 years old, and
  • not older than 75.

What you need to know:

  • During the first 6 months of the policy being on books, no claims will be paid out for natural causes.
  • Suicide is excluded for the first 2 years, and
  • this also applies to pre-existing conditions such as HIV.

Here’s the first thing they should be telling you:

  • All they need to quote and insure is your date of birth.
  • Smoking, health questions, none of that jazz is needed to process your application.
  • By the end of the call, you’re covered.

R200,000 life insurance, not enough?

Hollard Life will give you up to R1, 2 million without medicals.

So what will Hollard Life ask you?

Number one – Do you meet their three minimum requirements?

  • First of all, you need to have a valid SA ID or permanent residency status
  • Then you need an SA bank account
  • Then they want to know if this policy will replace any other. They do this because it’s required by law. So that you understand the implications of replacing life insurance.

Then they ask seven medical questions:

  • Have you suffered from a heart attack, cancer, stroke, organ failure, or coma in the past 10 years? And do you know whether you’re HIV positive?
  • Do you have an upcoming appointment with a specialist for any new medical conditions you might have besides pregnancy?
  • Are you on a medical aid (They want to know which scheme)?
  • Do you have a regular doctor (They want the contact details)?
  • In the past 5 years have you taken prescribed medication for more than a month besides pregnancy?
  • In the past 10 years, have you been in the hospital for more than 72 hours besides for pregnancy?
  • In the past 10 years, have you seen a medical specialist which resulted in treatment besides childbirth?

Then they ask for personal information such as:

  • Date of birth
  • Gender
  • Your education
  • How much you earn
  • Whether you want an escalation in cost every year (Escalation makes the initial cost cheaper but it’s optional). This stops at age 70, by the way.

And here’s what else they should be telling you:

The funeral benefit

  • Hollard throws in a funeral benefit at no extra cost – mahala!
  • Your partner and you are covered for R30,000 each while
  • up to 4 children are covered for R10,000 each.
  • We’re talking R100,000 funeral cover here.

The free cover

  • You also get an additional 30% cover free of charge if
  • you’ve had a negative HIV test done in the past 12 months.

The cash back benefit

  • This pays back 20% of
  • your monthly payments
  • every 5 years
  • regardless of whether you claim or not.
  • This is optional and comes at a small additional cost.

Here’s an example of how this works:

  • So R200 a month x 5 years x 12 months = R12,000.
  • R12,000 x 20% = R2,400 cash paid into your bank account.
  • R12,000 – R2,400 = R9,600 actual cost over 5 years
  • R9,600 divided by 60 months = R160 a month
  • Your actual cost drops from R200 a month to R160 a month!

Bob’s your uncle…no medicals needed.

The bottom line

We live in a dangerous world. As I write this I’m removing a young lady, who passed away unexpectedly, from one of our medical aid schemes. Her husband must now pay the full cost of membership himself.

Wouldn’t it have been nice to have received R30, 000 to take care of medical aid costs for the rest of this year?

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