In times of uncertainly, death cover offers peace of mind. One of the smartest ways to secure the future for your loved ones is by getting sufficient death cover by means of a death cover policy – this is a traditional life insurance policy that will ensure the financial obligations of your family are met when you die, and is commonly referred to as life cover in South Africa.
Key features of death cover usually include a lump sum pay-out; furthermore, there are usually further benefits that could be offered through your insurance service provider which cover financial planning or funeral cover, all depending on which plan you settle for or which service provider you use.
Death cover is usually the amount on a life insurance policy, pension or annuity that is payable to the beneficiary or beneficiaries when the insured dies.
Death benefits could be portion of the insured’s pension; in other words, the beneficiary might be eligible for a certain percentage of the pension at the time of death of the annuitant.
Naturally, the size and the structure of the payment will differ as packages differ from each other and will be determined by the kind of contract that is held by the annuitant at the time of his or her demise – this is also referred to as a survivor benefit.
The proceeds of death cover will either be in the form of a lump sum one-time pay-out or as a continuation of monthly or even annual annuity pay-outs directly to the beneficiaries, which is free of ordinary income tax.
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