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Types of Life Cover | My Bond Cover

Life assurance cover, life insurance, short-term life cover - it all fundamentally refers to the same type of personal liability cover. Whereas some life cover policies are intended to assure your loved ones' futures by means of death benefits or permanent disability payouts, bond cover specifically limits your personal liabilty against outstanding credit loans on a property (home loan).

Learn more about mortgage payment protection at Wikipedia, or read on for more information

Types of life cover

The types of life cover policies available to South Africans include bond cover, term life assurance, short-term life assurance, income protector plans, funeral plans and dread disease cover, to name but a few types.

Whereas bond cover and credit life protection policies provide your loved ones with financial protection by covering your estate against debt liability in the event of your death, some of the former policies provide your loved ones with a staggered benefit or lump sum payout in the event of your untimely death.

Although many of these types of policies share many commonalities, the exact benefits and terms and conditions differ from one life cover product to the next. Getting instant life insurance quotes online, you'll get a rough idea of what you can expect to pay for life cover. During 2010, Instant Life even introduced a fully automated online platform where you can take control of your own life insurance policy requirements,

It is adviseable to familiarise yourself with the exact details before signing up for any specific life cover policy. Your life assurance broker or investment consultant is qualified and authorised to help you tailor a solution based on your unique needs - don't be afraid to ask many questions.

What does bond cover do?

As sole breadwinner or young parent, it makes sense to make provisions for your families well-being. If you were to die prematurely, your personal estate would still be accountable for any debts, bonds or other lines of credit you'd incurred during your life - unless you'd had the foresight to take out adequate and appropriate life insurance, that is!

Taking out bond cover against the outstanding value of your home bond means that the asset will automatically be paid up in the event of your death or permanent disability. Being able to leave a fully paid-up property would not only give your family an asset base, but also not shackle them with the financial burden of having to settle your outstanding debts or have to experiene the trauma of a possible property repossession.

How bond cover policies work

Bond cover is based on comprehensive underwriting calculations. Taking into account factors such as your age, smoking habits, marital status, profession and financial profile, bond assurance companies determine your relative level of risk. Based on the probabability of your untimely death, dread disease or permanent disability, they calculate a monthly bond cover premium to provide you with insurance against the oustanding loan amount on your bond.

For as long as you pay your bond cover premiums, the cover remains intact. Some other types of life cover may also provide a fixed paid-up benefit if premium contributions are discontinued. Others may also reimburse a percentage of your premiums after a certain period of time if no claims were made against the policy. More recently, some policies even introduced a savings component, with a portion of your monthly contribution being invested in a dynamic interest bearing fund or account.

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