The December holiday is the perfect time for families to spend some quality time together away from the hustle and bustle of everyday life. With the ‘silly’ season almost here, many South Africans are already planning their year-end break.
Planning for the holiday should involve a lot more than simply checking tyres and booking hotels. It is also the right time to check that the right level of insurance cover exists for breadwinners and beneficiaries.
Liberty’s Financial Adviser, Phillip Kassel says, “It’s best to touch base with a financial adviser at this time of year to review long- and short-term insurance cover and clarify any exclusions or technical jargon that you are unclear about.”
“Many South Africans don’t realise that while they’re away on holiday, they expose themselves to increased risks. Not only do long distance drives on South African roads put you at risk of severe car accidents, there are also growing concerns about overseas travel, especially with increasing terrorist activity threatening many countries. That’s why protecting you and your family’s lifestyle from life’s unexpected events is essential,” he says.
According to Kassel, there are four important insurance risks directly linked to holiday season mishaps:
- Disability and Income Protection cover may contain certain exclusions. A once-off skiing holiday may not affect cover, but those who constantly participate in high risk activities like skydiving or outdoor rock-climbing, need to disclose these activities to the financial adviser and the insurer or run the risk of negating their insurance cover.
- Ensure that the right travel insurance is in place. While lifestyle insurance provides cover for major events related to long-term financial consequences, short-term travel insurance plays a vitally important role when travelling abroad. Travellers may have basic short-term cover in place. However, it may not be enough to cover losses related to baggage theft, emergency hospitalisation or other related incidents.
- An updated Last Will and Testament is essential. Too many South Africans neglect to update their beneficiaries, guardians and heirs in their Wills. This means that if something untoward does happen to the main breadwinner over the festive season, the beneficiaries may not be properly cared for. Kassel also recommends that those who have assets in different countries should make sure that there is a Will in place in each country.
- Check in on your Life Cover. A simple and conservative rule of thumb is to multiply annual nett income need by 21. Kassel explains, “If you need a monthly nett income of R10 000, you need cover of R10 000 x 12 months multiplied by 21. This would require cover of around R2 500 000.”
Kassel says: “For complete peace of mind over the festive season, ensure that you and your financial adviser cover all your individual needs. Taking the time to update your risk cover will ensure that nothing is left to chance while you are spending quality time with your loved ones this festive season.”