To cover for shortfalls in your estate.
Let’s use an example: Susan makes a will.
She leaves all her assets to her two children. She only possesses a house and nothing else.
She has debt of R100 000. At her death, the executor can only transfer the house to the children if the debt of R100 000 is paid in full.
Also, all the expenses and the executor’s fee must be paid. Since there is no cash in the estate, the children must either pay in the monies to cover for the debt and the expenses, or the house must be sold to cover the expenses and debt.
If Susan had a life insurance policy of say R200 000, this amount would have covered for the debt and the expenses and the house would not have had to be sold.
We will look at the amounts you need to consider for shortfalls in your estate and then refer you to a life insurance agent.