What you Need Life Insurance?

What is Life Insurance and Why Do We Need It?

No matter how diligently you build your financial empire, failure to purchase sufficient insurance can put you in a desperate position in a heartbeat!

The collective name for life insurance, disability cover and trauma cover is “risk cover”. Risk cover means protecting yourself against the risks in life. You therefore insure yourself against anything that could happen to you. This includes disability, accidents, traumas such as illness, and even death.

With life insurance, you protect yourself and your family against the risk of losing your income as a result of one of the above-mentioned events. When you have life insurance, the proceeds from the life insurance policy ensure that you and your loved ones continue with life, even if one of these events occurs.

Life insurance is an agreement between you (the insured) and the insurer (Botswana Life). Under the terms of a life insurance contract, the insurer promises to pay a certain sum to a person you have chosen (a beneficiary) if the insured event occurs, in exchange for your premium payments.

The following are some of the benefits of having life insurance:

Financial Security for Your Family

The most common reason for buying life insurance is to replace the income lost when you die. When you buy life insurance, you are making sure that those you love and take care of, being your beneficiaries, are financially provided for when you are no longer there. This money can be used to provide future income that your family needs to maintain their current lifestyle. You should also know that the proceeds of life insurance taken out for the benefit of spouse and children are not included, should there be any bankruptcy proceeds. Motlhokomedi Life Cover, Offshore Gold with Life Cover, Pinagare Premier Life Cover, Mompati with Life Cover and Mmoloki Family Wealth Protector Plan can all help you make sure that your family will always be financially secure.

A common use of life insurance proceeds is to pay off any debts you leave behind to avoid causing financial problems for your family. You may not have ceded your policy to one lender, therefore leaving it available for other general debts. For example, mortgages, car loans, medical bills, and credit card debts are often left unpaid when someone dies. These obligations must be paid from the assets left behind. This can deplete the resources that your family needs. Life insurance can be used to pay off these debts, leaving your other assets intact for your family to use. Products such as Motlhokomedi Life Cover, Mortgage Protector, Pinagare Premier Life Cover, Professional Term Assurance, Mompati with Life Cover and Offshore Gold with Life Cover can be used.

Cover Funeral Expenses

Due to death being so unpredictable, you can never know when there is going to be a funeral in your family, that is going to need your financial attention. Funerals are costly. Life insurance can be used to help pay for the various funeral expenses. Funeral policies such as Mmoloki Funeral Plan with Extended Family Funeral Benefit, Mosako Funeral Plan, Lore Master Plan and Motlamedi Premier Funeral Plan allow you to be best prepared by providing a payout when there is a funeral.

Cover Medical Expenses

Life insurance is also used at the time of an illness. It can help you cover medical expenses alongside your medical aid. You can find yourself in a situation where you need more funds to pay off extra medical expenses and yet you have exhausted your medical aid benefits. Mompati Hospital Cash, Mooki Hospital Cash Plan, Major Medical, Capital Disability Benefit and Dread Disease Benefit will all provide you with a payout that will help you deal with medical expenses for major illnesses and disability.

Loan Security

Life insurance can be used as security for a loan, which is called ceding, allowing you to borrow money for a project or property. Should you die before you repay the loan, the proceeds from the policy will repay your loan directly. This would leave your estate intact for inheritance by your dependants. To make sure that this happens, you need to make sure that you have Motlhokomedi Life Cover, Mortgage Protector, Pinagare Premier Funeral Plan, Professional Term Assurance, Mompati with Life Cover and Offshore Gold with Life Cover.

Protecting Your Business

If you are a business owner, then you have employees, you included, who are critical to the success of your business. You can take out life insurance on the life of these employees so that your business is compensated for any losses incurred if these people become unavailable due to death or disability. The proceeds from the life insurance policy can also be used to cover the expenses incurred in replacing the staff member. This type of insurance is known as Keyman Insurance. Products such as Motlhokomedi Life Cover, Mortgage Protector, Professional Term Assurance, Mompati with Life Cover, Offshore Gold with Life Cover and Capital Disability Benefit can be used to provide this cover.

Business Continuity

Life insurance can be a critical component for specialised business applications, such as funding a buy-sell agreement. Under a buy-sell agreement, life insurance can be used to provide cash for the purchase of a deceased owner's interest in the business. People in partnerships can take life insurance on each other’s lives so that they can buy their partner out without having to dissolve the business. This can be achieved when you have Motlhokomedi Life Cover Life, Professional Term Assurance, Pinagare Premier Life Cover, Mompati with Life Cover and Offshore Gold with Life Cover.

Pay Inheritance Taxes for Your Family

On your death, your beneficiaries will need to pay taxes if they inherit any assets from your estate. These taxes can be a significant sum of money. You can purchase life insurance products such as Motlhokomedi Life Cover, Pinagare Premier Life Cover, Mortgage Protector, Professional Term Assurance, Mompati with Life Cover and Offshore Gold with Life Cover so that the proceeds are used to pay these taxes. This will ensure that your beneficiaries don’t have to sell any of your assets in order to meet their tax liability.

Leaving a Legacy

Life insurance creates an estate for your heirs. After your debts, expenses and estate duties are paid, there may not be much left over for your family. Life insurance can automatically provide assets for them after your death. Products such as Motlhokomedi Life Cover, Mortgage Protector, Professional Term Assurance, Pinagare Premier Life Cover, Mompati with Life Cover and Offshore Gold with Life Cover can be used to provide this benefit.

Charitable Donations

Life insurance may also be a great way to give to charity when you die. You may have always had a great philanthropic desire, but not the means to make it a reality. Life insurance can do that for you. You could take out a life insurance policy on your life and state the beneficiary as your favourite charity. Products such as Motlhokomedi Life Cover, Professional Term Assurance, Pinagare Premier Life Cover, Mompati with Life Cover and Offshore Gold with Life Cover can be used for this purpose.