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Life Assurance
Sunday, January 1, 2012
Part of the plan

According to the Road Traffic Management Corporation, more than 1 100 people died in fatal car accidents between 1 and 28 December last year. “Old Mutual’s claim stats show that 25% of death claims are as a result of accidents, while 80% of accidental deaths are from motor vehicle accidents,” says Ferdi Booysen, Risk Product Manager for Old Mutual.

  “Families who are faced with the trauma of a serious accident are deeply affected both financially and emotionally.” Having sufficient risk insurance cover can go some way towards alleviating some of the stress.
“In the event of an accident that leaves you unable to perform your duties at work, disability cover will take care of the costs of making adjustments to your lifestyle.” These may include the costs of physiotherapy, buying and maintaining prosthetics, replacing your income if you need extended periods off work to recover, modifying your house or car and meeting medical shortfalls. Even if you are completely disabled and unable to work, adequate cover will ensure that you continue to receive an income.
“Upon death, the family might struggle to handle any outstanding debt, such as a mortgage bond or personal loan. If the estate does not have available funds to cover these unexpected loan repayments, it may result in some forced selling of assets within the estate. This is why a death benefit is vital. The proceeds can be used to repay debt, any outstanding loans, estate duty and other costs,” Booysen explains.
If you are a business owner or a partner in a business, death and disability cover can help towards a continuation of the business without added capital strain. For instance, the proceeds from a death benefit can be used by business partners to buy out the share of a deceased member. A buy-and-sell insurance contract can facilitate such a transaction.
An accidental death benefit provides protection in the event of death resulting from accidents or crime. It also covers clients who are medically uninsurable.
Important risk cover checklist:
• Look closely at the premiums and the amount for which you are covered. A cheaper initial premium may increase at an unaffordable rate in the future. Find out in advance about annual premium increases.
• Remember the younger and healthier you are when you take out cover, the better. You pay less.
• Read and understand the terms and conditions so that you know exactly what you are covered for, and how and when to claim.
• Disclose all health conditions when applying for cover, to prevent your claim from being rejected for non-disclosure.
• Ensure that you pay your monthly premiums and do not skip payments, to avoid losing your cover when you need it most.

It is important to speak to a financial adviser who can assess your needs and provide you with cover that best suits you. A holistic financial plan should consider not only provision for retirement, family healthcare and your children’s education. It should also take into account risk cover to protect you and your family from the financial impact of accidents and health setbacks.

Copyright © Insurance Times and Investments® Vol:25.1 1st January, 2012
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