A lot of people think about life cover only when they realise that death is a reality for every person. Young people see life insurance as a burden and an unnecessary cost. By the time they realize they might need it, it come with a hefty price tag or even might not be available.
Young people's life cover is very cost effective. With a few hundred rand per month you can take out millions in cover. The biggest benefit is that if you are young, your medical history is most probably clean and you will most probably get a policy without loadings and exclusions. That is a policy with no exclusions/loading.
That can change in a heartbeat. The moment your are formally diagnosed by a Dr with an illness the insurer will most probably exclude that condition from a policy you take out after the diagnoses. Let us say for example you are diagnosed with cancer, chances are that you will get life cover, but the insurer will exclude cancer from the policy. The insurance will then not pay out if you die as a result of cancer. This will cause a lot of stress for your family and can cause massive financial challenges for them after you passed away.
Any preexisting condition is scrutinized by the insurance and can cause loading on your policy and exclusions. If you have taken out this cover before the diagnosis, the insurance will not be able to exclude it. If the pre existing condition is serious enough the insurer can decide to decline the application altogether and you might be never able to get life cover ever again.
The other advantage of taking out cover when young, is that premiums get expensive very quickly. To explain this you can think about it this way. Life insurance is going to cost a person RX over a lifetime of premiums, the later you start the bigger chances you have of premium loading/exclusions and the shorter time you have in order to pay the Rx in premiums.
To Explain:
1. Loading: The insurer load an extra % over and above the normal premium on your life cover because the risk is higher from their perspective.
2. Exclusions: A definite exclusions of a condition/illness on the policy payout.
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