Why single moms need to ensure financial protection

SINGLE mothers, especially those who don’t receive any financial support from the fathers of their children, need to ensure they are protected should something unexpected happen to them.

According to Derick Ferreira, head of marketing at Old Mutual Personal Finance, preparing for the worst may seem pessimistic, but it’s important for women and especially critical for single mothers.

“Everyone is vulnerable to accidents and severe illnesses that threaten lifestyles and income earning abilities,” he says. “But as a single parent, these events also threaten to drastically impact your children’s quality of life.

“Having the right protection in place will enable you to explore the best treatment options while maintaining your family’s lifestyle. Old Mutual paid out an overall R9.28 billion in underwritten, non-underwritten and corporate claims in South Africa in 2016 – over R1bn more than in 2015.”

Ferreira said women accounted for 44% of severe illness claims, most (67%) being for cancer and tumours.

“Ironically, advances in science that improve our chances of surviving cancer, strokes or a heart attack carry other costs. Survival often comes at a huge financial cost because of lifestyle adjustments, the unexpected expenses of recovering from an illness, and more,” he said.

Ferreira added that one’s health and personal well-being were one’s most valuable assets – especially if one had dependants.

He said according to the 2017 Old Mutual Savings & Investment Monitor, 50% of metropolitan working mothers consider themselves single mothers, and 16% said they received regular financial support from the father of their children.

“This places a huge responsibility on mothers as the sole breadwinners to ensure their families will be protected if something unexpected happens to them.

“There are difficult questions we avoid asking ourselves. What would happen if I were to be diagnosed with a severe illness? Who would look after my children? How would I afford specialised care and making adjustments to my lifestyle? How would I afford my family’s daily needs if I couldn’t work?

“Having severe illness cover allows you to focus on your recovery instead of worrying about how you’ll pay for it and how you’ll continue to care for your family. You will receive a lump sum payout if you are diagnosed with a defined severe illness to help you cope through the challenging period.

“Partnering with a financial adviser to assess your needs will help ensure you have the right amount of cover for you and your family.

“A financial adviser takes your current circumstances and needs into account and works with you to create a customised financial plan.

‘‘Taking a proactive and holistic approach that incorporates expert advice will ensure long-term peace of mind for you and your family,” Ferreira said.