Life policy irreversible, can't convert to living annuity

Can one convert a life policy into a living annuity?

- Jaco Fouché

Dear reader

In the South African context, it's important to clarify the terms being used first.

A "life policy" typically refers to a life insurance policy, which is designed to pay a lump sum to your beneficiaries upon your death. However, if by "life policy" you mean a life annuity, the response changes, so I'll cover both scenarios for clarity.

1. Life insurance policy v living annuity

A life insurance policy and a living annuity serve different purposes in a financial plan. A life insurance policy provides financial protection for your dependants by paying a lump sum upon your death.

This payout is often used to settle debts, provide for education, or cover living expenses.