FAQ

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It is an option to use your credit card as a normal bank account. Banks are able to accept deposits into a credit card account; however, you will need to check with your employer that they are able to make payment into a credit card account as many insist on a saving or current account. You also need to keep in mind that the 16-digit number on your credit card is not always the same as the account number, so, for example if your card is lost/stolen/replaced the 16-digit number will change. This means that you will have to notify your employer of these changes to ensure your salary is paid into the correct account.
 
Using your credit card as a transactional tool – if you are pre-funding the balance and don’t use your limit – means you won’t have to pay debit interest. The same is also true if you pay the outstanding balance on your statement in full each month on or before the payment due date (within 55 days). You can also benefit from a higher earn rate on your rewards programme and build a solid credit history. If you use the account as a savings account, and keep a credit balance, you can earn credit interest. This is often a tiered rate depending on the amount. It’s wise to compare the interest on a savings account with a credit card to ensure you get the best rate.

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It depends from insurer to insurer. If the current insurance company has a list of approved panel beaters on their panel, they can insist that a client uses them for factors such as guarantee of work and the contract between the insurer and panel beater. However, should the client feel that the panel beater is not up to standard and insist on using their own panel beater, they should request this in writing and address this to the claims manager. He/she will make a decision based on the factors provided by the client. The insurer can then choose to accept the choice of the client. But should this result in defective workmanship, the insurer will not be held responsible as they do not have a guarantee agreement in place with that panel beater.

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Insurance is made possible by a large number of people sharing a common risk pool. The Insurer collects premiums, which they invest and hold in order to pay out claims.

Every member of the pool has to contribute in a fair way to ensure that the funds are not depleted by too low receipts.

Over decades the insurers’ actuaries have collected statistics about the factors that would cause risk of mortality to differ between people. Some of these are smoking, obesity and alcohol abuse.

This specific examples causes medical conditions to arise, and also accelerates and magnifies the scope of others. As an example, smoking can cause lung cancer, as well as worsen pneumonia. Obesity can cause heart attacks, as well as cause and worsen joint problems. Alcohol can destroy the liver, as well as heighten the odds of accidental death or injury.

The insurer therefore has to charge a loading on the premium to factor in the increased risk. As one gets older the penalty becomes more severe, because the risk increases with age. Ultimately these penalty premiums can negatively impact one’s lifestyle, as the amount of life cover can effectively cost more than triple that of an unloaded premium. You would either than have to pay much more, or lower the cover available for you and/or your dependents.

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It is advisable to take out Funeral Insurance in additional to Life insurance. The main reason would be that life insurance can take some time before the claim is settled, and that means your family will have to carry the burden of paying for your burial before they receive your life insurance.

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A term-life policy is the best and simplest option for most people ranging in age from about 20 to about 50. Cash-value life insurance can make sense for wealthy people over the age of 60 - but for most people, term insurance is the way to go.

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This is an important question, as making the wrong choice in selection here can have catastrophic results.

First of all we need clarity of what is really required as the terms insurance and assurance refer to differing industries.
Generally, the words insurance and assurance are considered to mean the same thing but their meaning is different. The word assurance is used for life assurance policies. The contract of assurance means that the assured will have to be paid sooner or later. This would be for example a death claim, or on maturity of an investment policy. The word insurance is used for fire and marine insurance, commonly referred to as short term insurance. Under the contract of insurance the risk is uncertain and the liability may or may not occur. For example a car may be stolen, might be involved in an accident, or could be hijacked. It might however also not happen.

In context of the sentence however I can safely presume that the reference is to life assurance.

Once again further clarity is required, as there are many kinds of cover, e.g. funeral cover, life cover, medical cover, etc.

The market offers many solutions for each possible kind of cover. There are dozens of insurers each presenting a plethora of options. Furthermore each person is individually rated based on factors like age, income and education. No one company will claim to be the best alternative for every person.

The Financial Advisory and Intermediary Services Act requires that an analysis must be done to ascertain what a person’s financial situation and requirements are. This is necessary to ensure that the consumer makes an informed decision, and is not “sold” a policy by a persuasive agent.

You should contact an accredited financial advisor, explain your situation, requirements and budget, and then go through a process of selecting a suitable option from viable alternatives.

In short, selecting the applicable assurance product can be compared to shopping for clothes. In this instance there is no “one size fits all” solution. Assurance needs to be tailor made.

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Some policies have surrender values, others have none. This depends on the kind of policy you have taken out.

Some of the available options are:

a.    Pure life cover: Here you pay only a risk premium. The whole premium goes towards life cover. This is the most economical option if you need life insurance.

b.    Life cover with cash values: The premium is split between risk cover and an investment portion. The cash values usually remain low for a considerable period, before starting to build up.

c.    Endowment policies: These are investments. The whole or a large portion of the contribution goes to the investment account. These can have risk covers as ancillary benefits.

Usually it is considered the better option to have separate policies for life and investment options. This is because a separate premium is paid for each, and if there is a claim or maturity on one, the other can continue. If you have a limited budget, you may have to combine the two.

When you take out a policy the insurer should clearly indicate the premium, as well as illustrative cash values of the product over set periods. If you do not have access to these records you can request a policy printout from your advisor. This would then convey this information to you.

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A traditional life cover policy that covers you for death as a result of natural and accidental causes is your best bet. Life insurance products are based on a pure risk basis nowadays, which means that there is no investment value attached to the policy making it cheaper than ever to insure your life. You never have to take out more than one life insurance policy because the products are so flexible, you can up, down or even cancel your cover whenever you see fit.

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You need to look at purchasing life cover as soon as you have major liabilities like a bond that need to be settled on your passing away. If you have children and a spouse that are dependent on your income, this also represents a good time to look at buying life cover to replace the income that would be lost if you where no longer around to provide for your family. You take life cover out to settle liabilities and to provide income for dependents.

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