Don’t let your insurance cover take a holiday


John Marsden, Managing Director: Citadel Financial Protection

Each December holiday season South Africans are confronted with shocking road fatality statistics. According to the AA, as many as 14,071 people died on South Africa’s roads in 2016 – a 9% increase from the 12,944 deaths recorded in 2015.

Unfortunately, this upsurge in accidents and heightened risk on the roads, as well as increased alcohol-related incidents, also coincides with a tendency to let insurance payments lapse due to poor financial planning and overspending.

This risk is compounded by the tendency for holidaymakers to throw caution to the wind and try out heart-racing extreme sports, such as wind surfing, water skiing, paragliding, bungee jumping and mountain climbing – thereby placing themselves at an increased risk of injury, disability or even death. Having insurance like medical aid cover is therefore absolutely vital this time of year, especially for breadwinners that hold the future of their family in their hands.

Insurance is, of course, a month-to-month purchase, and for many a grudge purchase at that. There is unfortunately no accumulative good will, so late payments, short payments or no payments at all simply means that your cover falls away, irrespective of how many years you’ve paid. Allowing that to happen poses a considerable threat to your financial well-being at any time during the year, but especially during high-risk holiday periods.

Of course ensuring that you are up to date with your financial obligations requires keeping a vigilant eye on your monetary situation. But with the end of year fast approaching, many lose interest in the tedium of keeping tabs on financial matters, including ensuring that you have sufficient funds to cover vital insurance payments.

That said, the end of year is the ideal time to take stock of your financial obligations and review your financial plan. Failing to do so can result in severe financial consequences should something unforeseen happen to you, your loved ones or your assets during this period.

It is for this reason that the advice and guidance of a qualified financial advisor is so important. Having someone in your corner who can work out the right plan for your individual circumstances and make sure that you don’t overextend yourself is essential. You should, for example, speak to your advisor about ensuring that you have at the very least enough cover for your gross monthly income. Then, in addition to this, it is advisable to have between five to 10 times your annual earnings in life cover.

Having a plan and acting on it – even if it is not yet optimised – is better than having no strategy at all. It will give you peace of mind that your family and assets are well protected, enabling you to relax and fully enjoy the festive season.