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<p><strong>By: Vera Nagtegaal, Executive Head of online comparison website </strong><a href="https://www.hippo.co.za/?campaignid=press" target="_blank" rel="noreferrer noopener" data-saferedirecturl="https://www.google.com/url?q=https://www.hippo.co.za/?campaignid%3Dpress&amp;source=gmail&amp;ust=1581053111572000&amp;usg=AFQjCNFjqg4LP79JZwyt9_hpP7LcNeJ7Xg"><strong>Hippo.co.za</strong></a></p>

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<p>Many young people tend to think that they have to wait until they are older, own a large asset or have children before they need to buy life cover. However, the best time to buy life cover is before you have done all these things.</p>

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<p>This is according to Vera Nagtegaal, Executive Head of online comparison website <a href="https://www.hippo.co.za/?campaignid=press" target="_blank" rel="noreferrer noopener" data-saferedirecturl="https://www.google.com/url?q=https://www.hippo.co.za/?campaignid%3Dpress&amp;source=gmail&amp;ust=1581053111572000&amp;usg=AFQjCNFjqg4LP79JZwyt9_hpP7LcNeJ7Xg">Hippo.co.za</a>, who says that young people are generally healthier – as they haven’t had much opportunity to develop lifestyle or ageing diseases.</p>

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<p>“Should they apply for life cover they are generally considered to be low risk and could be offered lower premiums and fewer exclusions – which means that they could be covered for death from any condition that they may develop later in life.”</p>

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<p>While younger people are less likely to have children, who rely on their income, many people have siblings, ageing parents or other relatives who are financially dependent on them. “In the unfortunate case that they should pass away, the life insurance pay-out would make things easier for their loved ones – both immediately after their death and in the longer term,” says Nagtegaal</p>

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<p>How much life cover you need can be a complex calculation and you should consider things like whether you have any debts that would need to be covered, or whether you have a legacy that you would like to leave behind for your loved ones.</p>

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<h3><strong>This is one way of calculating how much life cover you will need:</strong></h3>

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<ol><li>Take your gross monthly income x 12 = annual income before tax. </li><li>Calculate the number of years left to your expected retirement age, i.e. retirement age – current age = number of income-earning years left. </li><li>Multiply your gross annual income x the number of income-earning years left = the life cover required to replace your income. </li><li>Add the amount of debt/liabilities you currently have to point 3. </li><li>Subtract any current life insurance you have = how much life cover you should potentially have</li></ol>

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<p><strong><em>[Please note - this is one example of how life insurance could be calculated and does not constitute financial advice.]</em> </strong></p>

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<p>Once you have an idea of roughly how much you think you would need, you need to start thinking of the different types of life insurance. There is a range of life cover plans, so you don’t need to be boxed into a one-size-fits-all solution.</p>

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<p>Credit life insurance for example covers the amount that you still owe on certain debts. “This means that your estate – the people who inherit from you – would not be burdened with the costs of paying off any credit you might have,” explains Nagtegaal.</p>

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<p>Term life insurance covers you for a specific period – people might take it out when starting their first job, for example. Whereas whole life insurance, on the other hand, covers you for your whole life, as long as you continue to pay the premiums.</p>

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<p>There is also high-risk life insurance, for people who are classified as high risk by their insurers. “This could mean that you engage in dangerous activities like smoking, extreme sports, or have a high-risk characteristic like being overweight, or that your job is inherently higher risk, like for instance a policeman or a miner,” explains Nagtegaal.</p>

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<p>“If you start young, life insurance is affordable, and it offers you peace of mind that your loved ones will not be financially burdened if you pass away,” says Nagtegaal. “It’s worth comparing options and quotes from different providers so that you can give serious consideration to this valuable financial product.”</p>

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