AND LIABILITIES Izimangaliso: Early forties; married and the mother of two children; employed as a director of finance.
Current situation: Izimangaliso has life cover, disability cover, income protection, but no critical illness cover.
For Izimangaliso, who helps to provide financially for her children, life cover is important. She has disability cover that will pay out a tax-free “lump sum” if she becomes disabled, which could help to pay for lifestyle adjustments, paying off debt and ensuring ongoing income. Disability is defined differently, depending on occupation and daily work performance.
Recommendation by financial adviser Jastine Musonza: Izimangaliso has no critical illness cover, yet her age group and gender put her at risk of illnesses such as cancer, heart attack and stroke. Should the worst happen, critical illness offers a tax-free one-off payment to help to cover her mortgage, debts or pay for alterations to her home, such as wheelchair access, but it’s up to her how she spends it. She has income protection, which may not be necessary, as her employer is likely to support her during short-term illness or temporary disability. She also has disability cover. She could consider reducing her income protection in favour of critical illness cover.
ONLY BREADWINNERS Dipolelo: Early thirties; employed in rural development; supports his child and fiancée.
Omphile: Late twenties; employed as a military helicopter pilot; also supports his fiancée.
Current situation: Dipolelo has life and disability cover, but no critical illness cover. Omphile has comprehensive cover.
Life cover is important for both Dipolelo and Omphile, as their fiancées are currently unemployed and the men are the only breadwinners. Omphile has comprehensive insurance, which is sufficient for his fiancée, and they have no children. Dipolelo, however, needs to ensure that his cover is sufficient to provide for both his fiancée and son should something happen to him.
Recommendation by financial adviser Moshiase Okeke: Disability insurance is very important for a main breadwinner, but it is concerning that he does not have any critical illness cover.
For his age group, there is an increase of lifestylerelated illnesses, such as heart attack, diabetes, cancer and stroke. He needs to assess his current personal cover with that provided by his company to see if what he has is enough. A review may provide some flexibility to include critical illness cover.
CHILDREN, BUT SOME LIABILITIES
Charles: 29; married with no children; employed as agriculture lecturer. Current situation: He has life and funeral cover, but no critical illness or disability cover.
Although Charles’ need for life cover may be less pressing than Izimangaliso’s, as he has no children, he is still the main breadwinner and has outstanding debts. He needs to ensure his life cover is sufficient to cover his debts and provide some financial support for his wife.
Recommendation by financial adviser Khomotjo Ramoloto: Charles needs to protect his future income with disability cover. Like most young people in good health, he asks himself: Isn’t my chance for long-term disability pretty small? The question should rather be: Could I afford the consequences of not having cover? Momentum’s statistics show that the risk of disability is greater than death for Charles because of commuting patterns, his type of work, place of residence and a high risk of road accidents. He supplements his monthly income with a part-time job that makes up nearly 20% of his total income. Charles needs to consider protection for that portion of his income. If he is unable to work for a short time, his primary employer may support him, but he would lose the part-time
DEPENDANTS AND INDEBTED
Tumelo: Early twenties; single with no children; employed as a community service pharmacist.
Current situation: Tumelo has a range of cover: life, critical illness and disability.
While life cover is important to ensure Tumelo’s debts are settled, she has no dependants. Her focus must be on her future income, and her disability and critical illness cover will provide for that.
Recommendation by financial adviser Mduduzi Mpusula: Tumelo was sold a “package” deal that may have given her too much life cover. I recommend she reduce cover to the bare minimum and use the cash saved from premiums to reduce her large
credit card debt.
EMPLOYED Elzabe: Mid-fifties; self-employed guesthouse owner and entertainer. Current situation: Only has life cover.
Elzabe needs to have life cover in order to settle her debts, yet at this stage it is more important for her to protect her income through disability and critical illness cover. If she cannot work at the guesthouse, she will have no income. Also, critical illness is crucial cover for self-employed people.
Recommendation by financial adviser Frank Magwegwe: Being in her fifties, both critical illness and disability cover will be quite expensive. Although her current cash flow doesn’t allow for this, cutting some expenses for minimum income protection is important.
Finance expert Maya Fisher-French