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CityPress - - Trending - Most of the can­di­dates, like most em­ploy­ees, don’t know the amount of life, crit­i­cal ill­ness and dis­abil­ity cover of­fered by their em­ployer, yet this is ex­tremely im­por­tant in un­der­stand­ing where gaps in cover may ex­ist.

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

in­come.

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.

TUMELO

DIPOLELO

CHARLES

IZIMANGALISO

OM­PHILE

ELZ­ABE

MONEY GURU

Fi­nance ex­pert Maya Fisher-French

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