Petrie Marx, 21 January 2019
The dramatic cover deficit has long-term implications for individuals and the country at large and part of the problem, is a lack of understanding regarding which policies are necessary for adequate risk protection. Moreover, many young people find it extremely daunting to decide what kind of cover is important, especially on a starting out salary. This leaves them with a burning question: “So, what cover do I need, and when?”
Petrie Marx, Product Actuary at Sanlam Personal Finance, says there is no universal answer or fits-all approach as each individual has unique circumstances. “We would advise you to do a needs-based analysis – either with a financial adviser or through a ‘robo-advice’ tool like
Sanlam Now – to determine what cover best suits your requirements. There are myriad factors to consider, like your existing employee benefits or how to make adequate provision for yourself in the ‘sharing economy’.”
Marx further says that, while each person is different, there is a ‘framework’ for the kinds of cover you need at various stages in your life. “Again, this all depends on your circumstances and long-term financial plan. For example, you may see the benefit of buying risk cover early, while you are still young and healthy, to benefit from a lower cost, even if you don’t necessarily need the cover at that point in time.”
Marx suggests the following framework for the types of insurance you need at different life stages:
The same as with young adults, but also focus on protecting yourself – and your partner – from debt: co-signed debt or short-term like credit cards and personal loans. Consider credit life insurance and some additional
Marx concludes that this is just a guideline and says it is highly advisable to consult a financial adviser and go through the process of doing a needs-based analysis.