See if your insurance is appropriate

Many new clients go to a financial advisor with a clutch of life insurance policies no longer suitable for their current needs.

The need for life insurance decreases over time, as bread winners simultaneously accumulate savings and reduce contingent liabilities.

As you get older it’s more likely your home loan is paid, education costs have been met etc.

However, it’s normal with insurance companies for your level of life cover to increase as you get richer.

In our view, your level of cover should be finessed to cover your needs and the balance should be invested in assets of your choice and a geographic location to complement your overall investment strategy.

Insurance should be priced depending on a claim’s likelihood.

Some insurers try to increase market share by devising new products, sold at “discounts” to new clients. This is done knowing not many policy holders review their life policies regularly.

Your advisor will help check you’re paying a fair rate for appropriate life insurance.

Reviewing your will

Wills should be reviewed regularly to accommodate legislative changes, executor appointments and special bequests.

Those with assets in more than one country may require more than one will to meet different regulatory requirements.

In addition, the relative estimated values of bequeathed assets may change.

What might have seemed fair and justifiable 10 years ago may not today.

As of February, the SA estate duty rate increased from 20% to 25% on the dutiable amount on estates worth over R30 million.

If your estate is affected by this change, estate planning would be advisable.

Trevor Lee is a Rosebank Wealth Group financial planner

What might have seemed fair and justifiable 10 years ago may not today.