Tips on choosing insurance in South Africa

Thinking about insurance means thinking about loss and death, which is why many people prefer to put it off. But it's far better to choose an insurer who will help you meet your insurance needs than to run away from your responsibilities, says Pieter Du Toit, an insurance expert at FNB.

Here are seven tips to help you choose insurance:

1. Understand your needs. Your guide should be what those you leave behind will need. What will their financial obligations be? Funeral insurance is undoubtedly your most immediate concern as funeral costs can be steep.
2. Assess what you can afford. Finding the "perfect cover" and not being able to afford it is like owning a sports car and not having petrol, says Du Toit. Defaulting on payments can result in your losing the benefits of the policy, so be sure to compare quotes and decide what will suit your needs and your pocket.
3. Look at your purchasing options. You can go direct, use a financial planner or buy through an insurance agent. Ask about other fees that could affect your premium.
4. Find a reliable, established institution to insure with. Don't lose your money to a fly-by-night operator or a pyramid scheme -- insure with a company you can reasonably assume will be around in years to come.
5. Lead a healthy lifestyle. Many insurance companies either require that you undergo a medical examination or that you answer questions about your health truthfully. Steps like quitting smoking, reducing your cholesterol and leading a more active lifestyle can not only help you to get a cheaper premium, but will also mean a better quality of life.
6. Change your insurance as your lifestyle changes. As you grow older, your needs and the needs of your dependents will change. Make sure your insurance evolves and develops with you. Understand what insurance you currently own and study the terms and conditions of your policy to best make use of it.
   Through all this, ensure that all the details you provide your insurer with are correct -- incorrect information might lead to the termination of a contract or the loss of benefits.
7. Be careful that you are not over-insured. Over-insurance refers to owning an excess amount of insurance with the same insurer. If you have more than one of the same type of policy with an insurer, you could be over-insured and your second claim might be rejected. To avoid such situations, study the terms and conditions of your policy to gain an understanding of what your insurer regards as "over-insurance".

Source -mg.co.za

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