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Long Term Insurance Policies
Pure risk and pure investment policies
Pure risk policies offer only risk benefits. The entire premium (after deduction of costs) is used to
pay for the risk benefits. There is no investment element on the policy. Apart from the insured risk
benefits no other payment will be made from the policy.
Pure investment policies, on the other hand, don’t provide any insured cover amounts, but is
geared entirely towards savings. The entire premium (after deduction of costs) is used to
accumulate an investment value.
Although policies on which risk and investment elements were combined were very popular over
the past few decades, the latest trend is to separate risk from investment, and rather use separate
policies for each purpose. Pure risk or pure investment policies can be structured optimally to
provide the best value for a client’s money. Although Sanlam still has many combination policies
on its books, we no longer market new policies on which risk and investment elements are
combined.