Life insurance

[supersunbird]

Sure is easy but if you live to the average age it will be less then if you invested the money. Isurance companies have to win on average or they go out of business and they employ smart people to ensure they do.

If avoiding tax is your goal retirement annuities fall outside your estate and don't get estate tax. They also not subject to capital gains tax.

You are confusing insurance and investments both important but they serve different purposes.

Are retirement annuities not impacted by having to consider possible dependents, while life insurance can be more targeted to pay out to someone specific?

Funeral cover also has its place. Making funds available at short notice (Capitec paid our in under 24 hours), to cover funeral expenses but can also have some funds left over to meet other short term needs.

 

[TiredPlatypus]

Are retirement annuities not impacted by having to consider possible dependents, while life insurance can be more targeted to pay out to someone specific?

Funeral cover also has its place. Making funds available at short notice (Capitec paid our in under 24 hours), to cover funeral expenses but can also have some funds left over to meet other short term needs.

I did not know that, but quick googling seems to say yes

What happens to your retirement annuity if you die?

A retirement annuity is a great way to save for retirement, but happens to the capital in your RA if you die?

www.10x.co.za

Not sure how it plays out in practise as it says they consider your nominated beneficiaries. I.e how strongly do they consider them.

Anyway my main issue is trying to use insurance as an investment product which I don't believe it is, and would be surprised to see that tax benefits make it worthwhile. Even in the OP they say should you not get some premiums back after paying for so long. That is combing the insurance and investment which is an option but would be surprised if it was a good one.

 

[Pho3nix]

I did not know that, but quick googling seems to say yes

What happens to your retirement annuity if you die?

A retirement annuity is a great way to save for retirement, but happens to the capital in your RA if you die?

www.10x.co.za

Not sure how it plays out in practise as it says they consider your nominated beneficiaries. I.e how strongly do they consider them.

Anyway my main issue is trying to use insurance as an investment product which I don't believe it is, and would be surprised to see that tax benefits make it worthwhile. Even in the OP they say should you not get some premiums back after paying for so long. That is combing the insurance and investment which is an option but would be surprised if it was a good one.

It’s tax free for the beneficiaries and a decent jump start since it pays out in 1-3 months. Funeral cover is quick but other investments etc would be part of the estate which might impact timelines.

Life insurance isn’t for you but your kids etc. You ca decrease it if your kids don’t need it but remember they’ll be paying for your house and rates and taxes etc while the estate is being wound up

 

[Corelli]

So how big of a scam is Sanlam/Old Mutual life insurance?
My mother visited us tonight and at one point we were talking about increases in a lot of day to day stuff and she said that her life insurance installment is getting out of hand. Life insurance with Sanlam is now over R2000 per month with after increase with no noticeable increase in cover. She's 70 and had this life insurance for over 30 years.
I told her to cancel. She doesn't want to as she says she won't get anything out, even after the 30 year contribution. I told her again that I don't care about inheriting, and she can score month to month, but old people and their money......
So WTF is it with these life insurances that has nothing to offer the living? And WTF is it with old people still believing in this kak? Is there anything I can counter offer an old person to drop this and get something else?
It just seems that if you pay for over 30years, that when you cancel you should at least get a small cut back.

The older you get the more the premiums on your life insurance will generally increase, especially if you go over specific age numbers. You must understand life insurance has to pay a set amount out, and this is normally seperate from the general estate too. So make sure her beneficiaries are listen and up to date.

Also you can be hit by a bus at 30, and it will pay out. Thats what life insurance is about. It pays you out based on risk, and your premiums are also based on risk.

And while you can wait 5-6 years in getting an estate paid out, life insurance pays out normally withing 1-3 months and they can pay out a lot. I will keep my life insurance for my kids, even though the premiums go up. I pay about R1200pm for about 8 million in life cover.

 

[Corelli]

It’s tax free for the beneficiaries and a decent jump start since it pays out in 1-3 months. Funeral cover is quick but other investments etc would be part of the estate which might impact timelines.

Life insurance isn’t for you but your kids etc. You ca decrease it if your kids don’t need it but remember they’ll be paying for your house and rates and taxes etc while the estate is being wound up

Not exactly tax free. There will be some deductions. Liberty took off 10% of the value from my dad.

 

[Pho3nix]

Not exactly tax free. There will be some deductions. Liberty took off 10% of the value from my dad.

They shouldn’t have? Liberty didn’t take anything off from my mothers policy or my fathers. Standard didn’t either.

 

[TiredPlatypus]

They shouldn’t have? Liberty didn’t take anything off from my mothers policy or my fathers. Standard didn’t either.

It might relate to an approved vs an unapproved policy.

The difference between approved and unapproved group benefits

The fact that group risk cover can either be ‘approved’ or ‘unapproved’ often creates confusion.

www.moneyweb.co.za

 

[W@P]

The older you get the more the premiums on your life insurance will generally increase, especially if you go over specific age numbers. You must understand life insurance has to pay a set amount out, and this is normally seperate from the general estate too. So make sure her beneficiaries are listen and up to date.

Also you can be hit by a bus at 30, and it will pay out. Thats what life insurance is about. It pays you out based on risk, and your premiums are also based on risk.

And while you can wait 5-6 years in getting an estate paid out, life insurance pays out normally withing 1-3 months and they can pay out a lot. I will keep my life insurance for my kids, even though the premiums go up. I pay about R1200pm for about 8 million in life cover.

I must check mine again, but I am paying about R9k pm for just over double your cover. With whom is your life insurance? I would double or triple my cover if I were you with that kind of premium.

When my father passed away in 2024 the full amount was paid out tax free to me. There were a few bumps in the process as it was due to suicide and the amount involved. They had an investigator sent out to come see me who interrogated me for about 40 minutes.

I had to restrain myself to not lose my shiit and flip the 12 seater solid wooden dinner table over on him. Fscking idiot. After he left he submitted his findings to Discovery and the claim was paid out in the same week.

 

[W@P]

Are retirement annuities not impacted by having to consider possible dependents, while life insurance can be more targeted to pay out to someone specific?

Funeral cover also has its place. Making funds available at short notice (Capitec paid our in under 24 hours), to cover funeral expenses but can also have some funds left over to meet other short term needs.

My father had a few RA's when he passed. They were paid out to me as LA's. Full amounts. I was the nominated beneficiary on his RA's. The trustees of the relevant institution where the RA's are with have final discretion as to who gets how much, if there are more than 1 beneficiary or claimants.

In my experience, with my mothers passing in 2022, me and my dad were the nominated beneficiaries, 50/50. They paid that amount to us as an LA. There were questions asked with both my mother and my father's claims like "was I financially dependent on either?" So with my mother's case they paid out like they should have. So I got an LA and my father got an LA.

When my father passed he had 1 x LA(coming from my mothers claim) and then his RA's. Everything was paid out to me as LA's. His existing LA was transferred to me. And his RA's was converted to LA's in my name. So I now have my own RA's and then I have 4 x LA's, paying a monthly percentage of the minimum allowed which is 2.5% to me.

The amounts received from the LA's form part of ones tax return every year.

I have since changed all my life insurance, RA's and LA's and everything else's beneficiaries. It now stipulates it must be paid out to my family trust. And not split 50/50 between my 2 boys anymore as before. The only beneficiaries of the family trust in any case are the blood descendants from my mother and father and so it carries on through the generations. So at this stage it is just myself and my 2 boys and their blood offspring one day etc. Nobody else. They can try as they like.

Like i always say on the forum and in life. Get your affairs in order. With simple clear instructions. Let your family know what and how much is where. Update your will and make sure your beneficiaries on your stuff are in order. Don't leave any loose ends. Nail that shiiit down. You don't want to leave the ones that stay behind in world of a mess.