The NEED for insurance COVER

Insurance is not an unknown to the South African community, and certainly not a concept that is difficult to find information on – just Google the words “Life Insurance” or “Medical Aid” and a host of information is available. This information ranges from advice what to ask when requesting financial services from an advisor to requesting a quote online.

It is our opinion, that as the public become more knowledgeable and legislation more exacting, the need for high advice and financial coaching is imperative.  

The Meadow Group offers comprehensive and professional services to ensure that you are informed and looked after throughout your life personally and in business through company group benefits  and that those who are left behind when you are gone, are taken care of financially.

What is insurance cover?

Simply defined, insurance is where an individual sets aside a small portion of income in the present, in order to provide for an uncertain event in the future. There are 2 types of Insurance: Indemnity Insurance and Non-Indemnity Insurance.

Indemnity insurance is where the insured will recover the amount of the actual loss suffered, known as short term insurance. Providing cover for an uncertain event, such as motor vehicle theft. Non-Indemnity Insurance is where the amount which the insured has a right to receive is not necessarily equivalent to the actual loss suffered, known as long term insurance. Providing cover for a certain event, but the timing of the event is uncertain, such as death.

Why should all people, young and old, ill or healthy insure themselves?

Because we do not know when and how a life changing event will impact us, and because the insurance company that you are expecting to pay you for the event needs to protect the risk of this event happening, Insurance companies will “underwrite” your application.

The primary reason that insurance companies underwrite, is to maintain equity between policyholders in an attempt to ensure that the premium is in relation to the risk that the applicant poses to the company. Therefore, in most instances, an un-healthy, overweight, smoker will pay a higher premium than a healthy, non-smoker for example.

It is therefore critical that even when you are young and healthy, that you insure yourself adequately, as you will age, and your health may change, which all impact how much you pay and whether you are given cover in the future.

Statistics obtained from a large life insurance company, show that the major causes for death claims in their experience, are not related to any age or gender – but rather to accidents, crime and suicides.
This means, that no matter how young or healthy you may be, you are not at risk of being impacted!

This means, that no matter how young or healthy you may be, you are not at risk of being impacted!

In the coming weeks we will be highlighting specific elements of Life Insurance cover and Medical Scheme provisions. Read articles here on the importance of Disability Cover.

Week 1: Let’s focus on Disability and Income Protection

Becoming disabled will have significant consequences and financial obligations for you and your family.
Irrespective of what the disability may be, losing and arm, becoming wheelchair bound, losing your sight or hearing, or any other life adjusting physical impairment, may leave you in a desperate situation to have access to a lump sum amount of money to adjust your surroundings to your new special needs. Imagine the costs associated with changing a motor vehicle and home to accommodate a wheelchair!

Depending on what you are now physically able to do, there may well be an impact on your ability to earn an ongoing income, and for this, Income Protection insurance is critical. A recent article in the Personal Finance, highlighted the following statement was made by the life insurance ombudsman’s office: “Disability assurance is one of the most complex types of assurance, and disputes often arise because of misunderstanding over benefits covered or policy definitions and limitations”.

We look forward to hearing from you soon….

Anton du Preez | Director and Independent Registered Financial Coach
Cell: +27 (83) 445 2066
www.themedowgroup.co.za
The Meadow Group

Lifestyle and Financial Planning | Medical and Life Insurance | Investment | Wills & Administration of Deceased Estates
Short Term Insurance | Tax | Conveyancing