No one wants to put a monetary value on their life. Life is priceless and too valuable for that. But life insurance is a necessity, not only for peace of mind, but as a means of protecting the financial security of your family, and making sure they are safeguarded in the untimely event of your death.

According to Lenerd Louw, CEO of 1Lifedirect, South Africa’s first truly direct life insurer: “The task of choosing a life insurance policy can be confusing and somewhat daunting. There are many options to consider, many policies to decipher, and at the end of the day, every family has different needs and requirements.”

So how do you go about choosing a life insurance policy that is right for you and your family? 1Lifedirect offers the following tips on how to assess your life insurance needs: Do I need a life insurance?

If you have people who depend on you, you need life insurance. If you have debt, like a house that is bonded to a bank or vehicle repayments, you need life insurance. Life insurance helps protect your dependents and fulfill the obligations that you leave behind. Do I really need to use a broker or can I go the direct route?

When choosing whether to use a broker or go the direct route, it is important to keep in mind that brokers earn ongoing commission, receiving monthly administration fee payments as well. These payments are made to the broker for the lifetime of the policy. Because the direct life insurer does not incur these costs, the savings can be passed on to the client.

With 1Lifedirect, for example, you can save up to 22.5% on broker commissions and what’s more, 1Lifedirect customers will be covered within 20 minutes without needing a medical examination. Both insurance options offer benefits, but at the end of the day, it is up to the consumers to make the decision on which route they choose, based on what suits their lifestyle needs.

How much life insurance do I need?

Everyone's answer to that question is different as your personal situation is unique. Many factors influence the amount of life insurance you need, including: marital status, number of children, outstanding debts and how much you can afford to pay for premiums. A 1Lifedirect relationship manager will be able to guide you through this process and based on the factors above, will be able to recommend the right amount of cover and the best price. For example, with 1Lifedirect, a 30 year old female could get R1-million worth of cover for as little as R89 per month*.

What are the difference between Pure Life Cover and Credit Life Cover?

Usually there are two types of life insurance to choose from – Pure Life and Credit Life. With Pure Life Cover, the client’s beneficiaries will receive the value of the life insurance policy after the client’s death. Credit Life Cover will take care of any outstanding debt the client may leave behind, such as a bond or vehicle finance agreement. Depending on your personal needs, you would be able to purchase these options either together, or on a stand alone basis.

"Life insurance does not have to be a complicated exercise and can in fact be successfully arranged and implemented over the phone or internet. At 1Lifedirect, we believe that life is for living and shouldn’t be spent hassling with insurance, and that is why we have chosen to make the process of acquiring life insurance as simple and straightforward as possible, ultimately saving consumers money and valuable time", concludes Louw.

* Terms and Conditions Apply

The 2005 FinScope survey into financial usage and behaviour in South Africa found that only 13% of people have some form of life insurance. Insurance penetration levels remain extremely low in the LSM 1-5 population and only 4% have formal life assurance cover. Many people claim not to understand life insurance works and give unaffordability as the main reason for not buying cover.

According to Lenerd Louw, CEO of 1Lifedirect, South Africa ’s first truly direct life insurance provider:  “These figures are unacceptable.  Life insurance is an absolute necessity, not only for peace of mind, but as a means of protecting the financial security of your family, and making sure they are safeguarded in the untimely event of your death.  Everyone, regardless of how much income they earn, should have a life insurance policy in place and we have taken this into account when designing our product offering.”

1Lifedirect believes that affordability and access are the greatest hinders to purchasing life insurance for the lower-income market.  The company also believes that education is vital and therefore, will soon be embarking on a lower-income market awareness drive. 

“During our educational drive we aim to convey that purchasing life insurance does not have to be daunting, confusing or expensive,” says Louw. “The direct life insurance model is simple and straightforward, and you don’t need a broker to understand it. There are also no complicated investment components attached to our offering.”

Lately, the South African life insurance industry has been shrouded in negativity and bad press.  This has probably caused much confusion and distrust amongst consumers.  1Lifedirect aims to change perceptions with its new, fresh approach to purchasing life insurance.  

“At 1Lifedirect, we believe that life is for living and shouldn’t be spent hassling with insurance, and that is why we have chosen to make the process of acquiring life insurance as simple and straightforward as possible, ultimately saving consumers money and valuable time”, concludes Louw.

It has been said that men are traditionally more diligent in ensuring that they had adequate life insurance coverage. Internationally, statistics speak of 64% of American women having no life insurance at all and those that do have a life insurance policy, carry about half the amount of coverage than men do.

According to 1Lifedirect, South Africa’s first fully direct life insurer, it seems that South African women are bucking this trend. Lenerd Louw, CEO of 1Lifedirect explains: Since our inception in March 2006 we have noticed that nearly half of our client base is comprised of women. In fact, we have found that two-thirds as many women between the ages of 18-25 are taking out life insurance, compared to men in the same age group. We believe that the reason for this is because of the strength of our value proposition and the fact that women are less encumbered by broker-ties.”

Louw continues: Women have definitely cracked the corporate glass ceiling and are now taking more responsibility, at a younger age, for their overall wellbeing compared to previous generations. They are buying their own cars and properties and are making investments to build nest eggs that will ensure their financial independence into their old age.

With regards to life insurance, our experience indicates that women are nowadays also concentrating more on protecting the financial security of their family and fulfilling the financial obligations they leave behind. You are never too young or too old to take out life insurance.”

In the past, many younger women, may have felt that they could not afford life insurance and that it had too many time implications. With the introduction of 1Lifedirect however, a 30 year old woman can purchase a R1-million life insurance policy for as little as R89 per month and this can be done over the phone within 20 minutes.

Women need life insurance protection for the same reasons men do, to ensure that whoever survives them will be provided with financial protection. Now that life insurance is so affordable, there is no excuse for not having a policy in place,” concludes Louw.

For Alberton resident, Denise Dale, astronomy and space exploration has always been a passion. So much so that she is currently completing her Masters degree in astronomy. One day she hopes to achieve a PHD in astrophysics and become a researcher at NASA (National Aeronautics and Space Administration).

Thanks to the help of 1Lifedirect, South Africa’s first, fully direct life insurer and 94.7 Highveld Stereo, Denise was able to get one step closer to her lifelong dream, and experience America’s busiest space launch and landing facility.

I could not believe my luck. All I did was enter a radio competition and the next thing I knew, I was jetting off to the NASA Kennedy Space Centre in Florida. This was truly a dream come true and an unforgettable and magical experience,” says Denise.

Denise continues: At NASA I got to meet two astronauts – Robert Springer and Winston Scott, who took a South African flag into space and then presented it to President Thabo Mbeki. I also got to see NASA’s launch and landing facilities and have a go on interactive space stimulators like the mock space shuttle. The best part of the trip though was definitely experiencing zero gravity!”

Commenting on the lifelong dream competition, Lenerd Louw, CEO of 1Lifedirect says: At 1Lifedirect, we believe that life is for living. That is why we decided to run with this competition as it gives South Africans the opportunity to accomplish their ultimate ambition. We are extremely pleased that we were able to make Denise’s lifelong dream a reality.”

In just under five months, 1Lifedirect, South Africa’s first truly direct life insurer, has been able to prove that the direct life insurance channel is a force to be reckoned with. The company has managed to exceed all budgetary expectations and has, since its inception in March 2006, sold R5 billion worth of life cover.

According to Lenerd Louw, CEO of 1Lifedirect:  “Our entrance into the life insurance market was greeted with an overwhelming response from the South African public.  Many of our clients were jaded by the shoddy service they had experienced in the past and were looking for a viable alternative.  These new figures confirm that consumers welcome our direct channel’s ease, convenience and simplified product offering and that you can cut out the middleman, and save, when it comes to life insurance.”

Louw continues:  “Our success to date can be attributed to the fact that consumers have noticed that there is a need for change within the life insurance industry and are now confident to investigate other options.  In addition, many consumers did not know how much commission they were actually being charged in the past by brokers, and have welcomed the fact that they do not have to pay broker commissions with 1Lifedirect.  Our clients have also been pleasantly surprised by the cost effective quotes they have been receiving from us, and have realised that you can get a quality product, quickly, without the hassle of lengthy broker meetings and paperwork.”

The fact that 1Lifedirect is financially backed by Budget Holdings Limited (BHL), a large multi-national company based in Europe and that it has funding in place to preserve the stability of the company has also gone a long way in installing confidence in consumers. 

“We are confident that the success we have experienced to date will continue and look forward to a bright future” concludes Louw.

They said it could not be done. They said that life insurance was sold and not bought and said that brokers and life insurance go hand in hand. In just under seven months, South Africa’s first fully direct life insurer – 1Lifedirect – has caused these critics to change their tune.

Interim financial results from 1Lifedirect show that the company has managed to exceed its budgetary expectations by selling over R1 billion worth of life cover per month.  

According to Lenerd Louw, CEO of 1Lifedirect:  “When 1Lifedirect was launched in March 2006, we predicted that by 2008, the life industry would be worth R11.5 billion and comprise 2.7 million policyholders.  We aimed to capture 6% of this market by 2008 with a premium income of over R500 million per year.  We have sold just under            R7 billion worth of life cover to date and are expecting that by 2008, we will surpass our initial financial forecasts.”

Louw continues: “Our entrance into the life insurance market was greeted with an overwhelming response from the South African public.  Many of our clients were jaded by the shoddy service they had experienced in the past and were looking for a viable alternative.  These figures confirm that you can cut out the middleman, and save, when it comes to life insurance."

1Lifedirect’s products have proved particularly popular for the emerging market.  Louw believes that the emerging market is not encumbered with broker ties and has welcomed the direct life insurance channels ease, convenience and cost-effective quotes.

“Consumers noticed that there was a need for change within the life insurance industry and are now confident to investigate other options.  Many consumers did not know how much commission they were actually being charged in the past by brokers, and have welcomed the fact that they do not have to pay broker commissions with 1Lifedirect.   We are confident that the success we have experienced to date will continue and look forward to a bright future” concludes Louw.

Premiums will be influenced by your age and your health condition or any health risks associated with you. Insurance companies generally compel you to undertake a medical test to assure that you are free from any serious health issues that may put you at a higher mortality risk.

Jobs existing of higher risk activities, for example being a driver or a pilot, can also influence your premium. Hobbies like scuba- or sky diving and motorsport also associate you with high mortality risks and therefor it can elevate your premium.

When you are involved in these higher risk activities in your job or as a hobby, you must shop around more carefully because insurance companies assess these risks differently. Some companies are known for specializing in certain health risks and would offer lowered premiums for people involved in that particular risk.

Insurance agents or salesmen work for commission and therefor they need to work at a higher rate. Insurance companies can minimize costs by using the Internet for sales and this will lead to lower premiums for the purchaser.

Life insurance is a very important and long-term commitment and that is why the process of shopping around is considered necessary and made more convenient with online insurance quotes. Click here for a free life insurance quote.

Your decision will be a long-term financial commitment and therefor be a difficult one that needs careful consideration. Nobody knows what the future holds for them and if they will be able to pay the premiums as contracted for the rest of their lives, but fortunately you can end these policies earlier if your financial situation and needs would force you to do so. Each policy has a different view and penalties for early termination that you must familiarize yourself with when you think your family's situation is likely to change.

Life insurance, together with a pension fund, is an efficient method of saving for your family's future and your retirement. Young families with children to support really need financial security for the future and life insurance can help you to provide for these concerns. Your current income and lifestyle will influence the type of life insurance policy you would consider.

Shop around and compare different quotations to find the most suitable, affordable and efficient policy for your family's personal needs.

Click here for a free life insurance quote.

Although insurance brokers were used in the past for their knowledge and specialized advice, online life insurance can offer exactly the same policies as the salesman.

Except for the fact that premiums are lowered by the great deal of competition due to the Internet, specialized advice is also offered on the web site or for further information advisers could be reached by telephone.

The reduced premium does not mean that the standard of online life insurance is lowered, but that online brokers generally cut their commission for more competitive deals.

Buying life insurance is made more efficient and convenient by the Internet, while saving you some money at the same time!

Click here for a free life insurance quote.