Risk Management

The art of good risk management is managing those risks that you are capable of managing and insuring against those you cannot. In the financial planning context the risks you cannot manage are your death or incapacity before retirement. These events will interrupt the income required by yourself and/or your dependents, and will also interrupt the accumulation of capital for retirement. Clearly you must insure against these.

Life Cover

You need life cover to cover your liabilities and meet any claims that may arise against your estate, including estate duty, and to provide sufficient capital for your dependents in order to maintain their standard of living.

Income Protection

  • Sickness Cover

    Temporary income protection.

  • Monthly Income Protection

    This benefit is a monthly incapacity benefit that will be payable for a disability, resulting from a disease, injury or accident or other cause, that is continuous, permanent and significant in nature that prevents you from working.

Lump Sum Disability cover

The risk considerations applied to life cover are equally relevant to the risk of becoming permanently disabled. Lump sum disability cover is available in two forms:

  • Occupational Impairment

    In the event of you being totally disabled the insured amount will be paid to you free of tax. The definition of the term ‘disability’ will vary depending on the nature of the insured’s occupation. You would be regarded as being totally and permanently disabled if you were incapable of pursuing your chosen occupation (also known as own occupation) or, in certain instances, another occupation (also known as own or similar occupation) that you could reasonably be expected to follow.

  • Functional Impairment and Physical Impairment

    This lump sum disability benefit, pays when an impairment of the whole person affects one’s ability to earn an income. It is important to remember that the impairment benefit is not assessed against occupation. The benefit will be assessed based on criteria as stated in the benefit definitions, regardless of whether or not this affects your ability to work. Since the benefit takes no cognizance of your occupation, the impairment benefit may pay a claim when you are still able to work.

Severe Illness Cover

Provides cover for specified severe illnesses by paying a lump sum in the event of diagnosis or occurrence of such illnesses that is covered in your contract according to that particular insurance company’s contract wording. It must be noted that different companies cover different listed events and word their contracts differently. That means, for a particular event, one company may pay the claim or a percentage of the claim, while another company may not even pay a percentage of the covered amount. Dread disease (Severe illness cover) can strike at any time and can impact on the sustainability of your investment strategy. Serious consideration needs to be given to insuring the possible loss of income and expenses that result from suffering from such a disease.