Introduction to Life Insurance

What is the primary purpose of a life policy?

• To pay for groceries

• To protect your home against fire

• To provide financial support to beneficiaries after the policyholder's death
  
  

• To offer investment returns only

Which of the following is NOT a common use of a life insurance payout?

• Paying off debts

• Funding a family holiday

• Covering funeral expenses

• Supporting dependents financially

In South Africa, what is the payout from a life policy typically called?

• Interest Return

• Funeral Benefit

• Death Benefit

• Dividend

Which type of life policy covers you for your entire life, as long as you pay premiums?

• Term Life Insurance

• Whole Life Insurance

• Credit Life Insurance

• Funeral Policy

What happens if you outlive a Term Life Insurance policy?

• You get a lump sum payout

• Your premiums are refunded

• There is no payout

• You are automatically covered for life

What kind of life policy is typically used to pay for a person’s funeral costs?

• Whole Life Insurance

• Funeral Policy

• Credit Life Insurance

• Endowment Policy

Are life insurance payouts generally taxable in South Africa?

• Yes, always

• Only if the payout is over R1 million
  
  

• No, they are usually tax-free

• Only if no beneficiary is listed

What is the advantage of naming a beneficiary in a life policy?

• They have to pay estate taxes

• The payout goes directly to them and avoids delays

• They will automatically inherit your entire estate

• It increases your monthly premium

What is a Credit Life Insurance policy used for?

• Investing in unit trusts

• Paying for medical aid

• Settling debt if the policyholder dies

• Funding a child’s education

Who typically needs a life policy the most?

• Teenagers

• People with no debt and no dependents

• People with dependents or large financial obligations

• Tourists visiting South Africa