Fu­ture

Would you let your ex-spouse take out in­sur­ance on your life, asks

CityPress - - Tenders -

than as a lump sum.

This is not only for cau­tious ex-spouses, but for any­one who is con­cerned that their ben­e­fi­cia­ries may blow the money rather than use it to pro­vide an in­come to re­place that of the bread­win­ner.

“We see cases where there is mas­sive pres­sure on an in­di­vid­ual if they in­herit a lump sum to share it with the com­mu­nity, even if the rea­son for the cover was to pro­vide an in­come.

“Few peo­ple are equipped to han­dle a lump sum and don’t re­alise that while R1 mil­lion may sound like a lot of money, it only pro­vides an in­come of R5 000 per month,” says Malan, who adds that many clients are struc­tur­ing their life cover so that they have a lump sum to set­tle out­stand­ing debt with an in­come paid to sup­port the fam­ily.

“For many peo­ple the idea of a large lump sum makes them un­com­fort­able, as if they are worth more dead than alive. By struc­tur­ing the cover as an in­come, it feels more re­al­is­tic,” says Malan, who adds that this in­come also has the ad­van­tage that it can­not form part of a new mar­riage if the sur­viv­ing spouse re­mar­ries.

It also re­moves any worry about the lump sum be­ing poorly in­vested or mis­used.

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