Both Old Mutual and Liberty are prominent names in South Africa’s life insurance sector, offering extensive cover options that cater to a wide range of needs. Old Mutual is known for its versatile offerings with add-ons like disability and severe illness cover, while Liberty provides a streamlined, no-hassle policy with flexible options and a straightforward application process.
In this review, we’ll break down the key aspects of these life insurance products, focusing on their core benefits, eligibility requirements, and who each policy is best suited for.
Key Features Comparison: Old Mutual Life Insurance Vs Liberty Life Cover
| Feature | Old Mutual Life Insurance | Liberty Life Cover |
|---|---|---|
| Payout Amount | R100,000 to R30 million | Up to R10 million |
| Tax-Free Payout | Yes | Yes |
| Cover for Accidental Death | Yes | Yes |
| Cover for Terminal Illness | Yes (with less than 12 months to live) | No |
| Disability Cover | Yes (R100,000 to R30 million) | No |
| Severe Illness Cover | Yes (R100,000 to R6 million) | No |
| Premium Protection | Yes (waives premiums if payer is disabled, impaired, retrenched, or dies) | No |
| Cashback Benefit | Yes (pays back a percentage every 5 years) | No |
| Medical Examination Requirement | No (for some benefits) | HIV test required within 90 days |
| Exclusions | Suicide within 2 years, standardized critical illness definitions | Suicide within 24 months, illegal activities, war |
| Monthly Premium | Based on individual profile and cover amount | Starts from R128 (varies based on risk profile) |
| Age Eligibility | 14 to 79 (depending on cover type) | 18 to 65 |
| Flexibility | Add/remove benefits, adjust cover pattern | Adjust cover and beneficiaries as needed |
Benefits of Old Mutual Life Insurance
Comprehensive Coverage
Old Mutual offers one of the most comprehensive life insurance policies in South Africa. It covers not only death (accidental and non-accidental) but also terminal illness, severe illnesses like heart attacks and cancer, and various types of disability. This makes it a suitable choice for individuals seeking extensive protection.
Disability and Functional Impairment Cover
For those who are concerned about becoming disabled or impaired, Old Mutual provides coverage that can be extended with options like the “Own Occupation Benefit” or “Partial Functional Impairment Benefit.” This flexibility allows you to tailor your policy based on your occupation or potential risks.
Premium Protection and Cashback Benefits
Old Mutual waives your premiums if you become disabled, retrenched, or die, ensuring that the policy continues without additional cost to your family. Additionally, the cashback feature, which pays back a portion of premiums every five years, is a significant financial benefit.
Severe Illness and Physical Impairment Cover
With severe illness cover ranging from R100,000 to R6 million and physical impairment cover up to R4 million, Old Mutual offers ample protection for critical health issues. The Cancer Enhancer can even increase the payout by up to 25% if your quality of life is severely impacted by treatment.
Benefits of Liberty Life Cover
Simple and Hassle-Free Application
Liberty Life Cover is designed for simplicity and convenience. With no need for full medical exams and a straightforward application process, this policy is perfect for individuals who want coverage without the hassle. The only medical requirement is an HIV test within the first 90 days of the policy.
Flexibility and Control
Liberty Life allows policyholders to adjust their coverage as life changes—whether it’s due to marriage, parenthood, or retirement. You can also designate unlimited beneficiaries and control how the payout is distributed among them.
Affordable Premiums
Starting at R128 per month, Liberty Life Cover offers competitive pricing. While the premium may vary based on your risk profile, it remains one of the most cost-effective options in the market.
Tax-Free Lump Sum Payout
Like Old Mutual, Liberty provides a tax-free lump sum payout of up to R10 million to beneficiaries, ensuring that your family will receive the full benefit amount without any tax deductions.
Requirements for Old Mutual Life Insurance
- Age Eligibility: Minimum age of 14 years old. Life cover is available up to 79 years, while other cover types have different age limits (59 for Disability Cover, 64 for Functional and Physical Impairment Cover, and 69 for Severe Illness Cover).
- No Medical Exam: Most policies do not require a medical examination unless you are applying for additional cover or specific benefits.
- Exclusions: No payout for suicide within the first two years of the policy. Standardized definitions for critical illness claims apply.
Requirements for Liberty Life Cover
- Age Eligibility: South African citizens aged between 18 and 65.
- HIV Test: Required within 90 days of the policy start date. If not completed, coverage is limited to accidental death.
- No Medical Exam: No full medicals are required, making it easy to apply over the phone or online.
- Exclusions: Includes suicide within the first 24 months, illegal activities, and death during war.
Pros and Cons of Old Mutual Life Insurance
Pros:
- Comprehensive coverage for life, disability, severe illness, and impairment.
- Premium protection ensures coverage continues even if you cannot pay premiums.
- Cashback benefit provides additional financial relief.
- Flexible add-on options to tailor coverage to individual needs.
Cons:
- Premiums can be higher due to the extensive cover options.
- No refunds if the policy is canceled.
- Age limits apply to certain benefits, which could reduce flexibility for older applicants.
Pros and Cons of Liberty Life Cover
Pros:
- Affordable premiums starting at R128.
- Simple and hassle-free application process.
- Flexibility to adjust coverage and beneficiaries as needed.
- No full medical exams, making it convenient for most applicants.
Cons:
- Lower maximum payout (R10 million) compared to Old Mutual.
- Limited cover options (no severe illness or disability cover).
- HIV test requirement within 90 days could be restrictive for some.
Who Are These Policies Suitable For?
Old Mutual Life Insurance
Old Mutual Life Insurance is ideal for individuals seeking comprehensive protection. The extensive cover options, including disability, severe illness, and impairment, make it a good choice for those with higher risk factors or families who want full coverage. The policy is also suited for individuals who want flexibility in tailoring their benefits and coverage.
Liberty Life Cover
Liberty Life Cover is best suited for individuals looking for a straightforward, affordable life insurance policy. With no full medical exams and a quick application process, it is ideal for younger, healthy applicants who want flexibility in adjusting their coverage as their life circumstances change. The lower premiums and hassle-free approach also make it an attractive option for budget-conscious consumers.
Conclusion
Both Old Mutual Life Insurance and Liberty Life Cover offer valuable life insurance solutions tailored to different needs. Old Mutual stands out for its comprehensive protection, making it the better option for those seeking full coverage, including disability and severe illness. Liberty Life, on the other hand, is perfect for individuals seeking affordable, hassle-free life cover with the flexibility to adjust their policy as life changes. Ultimately, your choice will depend on your specific insurance needs, health condition, and budget.