8 February 2021
When our world has spun off its axis as we’ve lost control, we need to first regain financial control by returning to our budget. When that is comfortable, and we’re rebuilding that habit, the next habit is to regain control over our saving.
The third area of control is around protection; risk cover.
From minor health ailments to permanent disability and death, we have a range of risk management tools at our disposal to preserve our future earning potential, and to protect ourselves and our loved ones.
With many individuals being financially, economically and physiologically affected by the coronavirus, it’s essential to re-examine our risk cover. When times are tight, it’s very tempting to reduce or cancel risk protection as a form of belt-tightening. However, this can have knock-on effects concerning affordability and insurability down the line.
In the same way that a budget should be an expansive tool and not limiting, risk cover should be seen as an empowering decision, rather than a fear-based grudge purchase.
The question we need to ask ourselves is, “If I cannot work for a few months due to a health emergency, how will I bankroll my financial commitments?” Whether we receive a scary diagnosis or find ourselves in a car accident, our regular bills are still going to be due on top of any payments for procedures and treatments.
We can look at risk cover in terms of health cover, disability cover and life cover. Within each of these risk sectors, we have various products to safeguard specific aspects of our prosperity and welfare.
For health, we have products like gap cover, a short-term insurance product designed to cover shortfalls incurred while in hospital. Gap cover is an excellent complement to medical cover for seeing to fees charged by healthcare providers which are in excess of the fees paid by our medical scheme.
Permanent disability can be covered by lump-sum disability cover. This provides a single capital payout and is generally used to ensure that you can maintain your financial responsibilities should you become physically incapacitated.
Similarly, we have life insurance covering untimely passing, which secures a lump-sum payout to your beneficiaries. Life cover is generally used as a means for effectively ensuring that your home loan and other debts can be settled.
These are only three of a multitude of products that fall under the designation of risk cover. Additional products include medical aid, dread disease cover, income protection, and more. While these products may seem morbid in conception, they provide us with affirmation and a sense of comfort knowing that we are covered for most traumatic events. Remember, insurance can be a technical minefield as it is loaded with specialised jargon that differs from insurer to insurer.
If you need assistance prioritising your cover and ensuring that you are covered for the appropriate risk, chat to us today.