Short-term assurance is a policy that can be taken out over a certain period (for example, 10 years). If something happens to the policyholder during that time, then the insurance company pays a set amount to their family. But if the person does not die within that time, then at the end of the time of the policy, the contract with the insurance company is over and the policyholder CANNOT get any of the money back.

INSURING A MOTOR VEHICLE

Every person who buys a vehicle should make sure that it is insured. Insurance is taken to cover a vehicle in the event of accidental loss, theft or damage. People who take out insurance have to pay the insurance company a certain amount of money each year. Insurance companies provide compensation when people are injured or their property is damaged.

Insurance companies protecting people against injuries may give cover for medical bills, lost wages, pain and suffering and disfigurement (where a person’s body becomes deformed).

If the insured person dies, an insurance company may pay medical and funeral expenses and compensate the people whom the dead person was supporting.

Most motor accident insurance policies provide compensation for injury and death. The Road Accident Fund automatically covers third-party insurance. This does not cover damage to the person’s property (including your car). (See Third-party claims) Comprehensive insurance is not compulsory but it will cover you if your car is damaged in a motor accident. Comprehensive insurance gives all the benefits of the balance of third-party (in other words those costs that are not covered by a third-party claim), fire and theft insurance as well as cover against damage to the vehicle no matter how the damage to your car was caused. (See Comprehensive insurance)