Insurance: the long and short of it

Insurance can be distinguished between long-term and short-term insurance.

Unlike long-term insurance, some short-term insurance policies can endure for a definite or indefinite period.

Long-term insurance involves insurance over the insured person's life and wellbeing, including that of his or her family. This type of insurance plan differs from one life insurance provider to the next and the monthly payments are often determined by factors including one's age, state of health and other dynamics which play a role in one's day-to-day living.

Short-term insurance encompasses all other types of insurance such as building insurance, home contents insurance, vehicle insurance, medical insurance, travel insurance, business insurance and a range of other insurance policies. Unlike long-term insurance, some short-term insurance policies can endure for a definite or indefinite period - due to a cancellation or late payments. Short-term insurance is also flexible according to the insured person's needs. 

What is insurance and why do I need it?

It's understandable, you've just bought one the largest assets you'll ever own and the last thing you need is having to part ways with more money. But no matter how unlikely it may seem, life is full of unplanned events, some more unfortunate than others, and there's nothing worse than not having 'security' measures in place. Insurance is the safe haven against those 'what if' events.  

Your building insurance would also cover less serious damage, such as geyser mishaps, boundary wall damages or damage to the property as a result of broken branches and trees.

When you apply for a home loan, building insurance is mandatory as it covers your property against loss and damage beyond your control, such as theft, fire, floods, wind damage, earthquakes or other natural disasters. While you are not obliged to take the building insurance that your bank offers, it is usually compulsory for you to prove that you have this type of cover in place.

In most cases, your building insurance would also cover less serious damage, such as geyser mishaps, boundary wall damages or damage to the property as a result of broken branches and trees, leaving you with peace of mind and the assurance that it will be taken care of without you having to fork out hundreds of rands not budgeted for.