When shopping for life insurance in South Africa, it is tempting to go for the lowest monthly premium. After all, most individuals value the opportunity to reduce their monthly expenses.
But here is the reality: “cheap” life insurance can end up being very expensive — especially if you do not understand how premiums work over time.
Why is Cheap Life Insurance not Always the Best Deal?
Many policies offer a low entry-level premium, but what you may not realise is that the cost increases sharply over time. This is called an escalating premium structure. This catches many people off guard and they only realize it once the premium becomes unaffordable — often forcing them to cancel the policy just when they need it most.
Why Premium Planning Matters: A Real Example
Let’s say you are in your late 40s and taking out life insurance with a low starting premium of R500 — sounds like a win, right? But here is what happens behind the scenes:
With some products (like those with escalating premiums):
That affordable premium you started with, could triple (or more) by the time you are 60 — and continue climbing every single year. In fact, by age 60, you could be paying well over R25,000 per month, depending on the policy and annual increase.
In other words, at the age of 60 when you need financial stability, your insurance policy may become unaffordable — forcing you to terminate or reduce your benefits.
At Navigate Financial Services (Pty) Ltd, we believe in sustainable solutions. We encourage and offer a premium settlement option. This means your premiums are structured to remain stable and affordable and your premium contribution ceases completely after a certain age, while your cover continues.
If you are serious about protecting and providing for your family by utilising a life policy, please consider the following:
This premium pattern allows for your premiums to stay the same over the entire term of the policy, helping you budget and plan. While the initial cost at inception may be higher, it saves you from big future increases and allows for your policy to be more affordable over time.
Good life cover policies can adjust to life changes for example marriage, having children, or buying a home. Ask about inflation-linked benefits or critical illness cover.
Everyone’s needs are different. Therefore a qualified financial planner is important to help you identify and build a policy according to your needs and that complement your lifestyle and long-term financial goals.
At Navigate Financial Services (Pty) Ltd we guide you through every step. Whether you are looking for affordable life insurance or smart investment strategies, our team is capable and eager to help you. Please contact us:
📍 Humansdorp Office – 42 Voortrekker Road, Humansdorp | 042 294 0199
📍 KZN Office – 464 Andrew Zondo Road, Amanzimtoti | 031 904 3784
📧 office@navigatewealth.co.za | 🌐 navigatewealth.co.za
Designed by Klikmagnet Digital Marketing
