Plan your f inances as if you expect the unexpected
It happens in an unavoidable, terribly violent second. thought I had missed an out-of-control meat refrigeration truck that had smashed head-on into the car in front of me.
But the force of that impact whipped the back of the truck into the air, swinging it across the road to crash down on to my car, directly above my wife, Lynne.
In the most horrifying minutes of my life, I knew she had to be dead. There was blood everywhere; Lynne was not responding, trapped under the pounded down roof.
What happened next is now a bit of a blur. But the immense sense of having lost the person who brings me great happiness every day was replaced by enormous relief when Dr Vickers Nienaber told me that Lynne had a pulse.
Dr Nienaber, you and your wife, Ezileda, are real Samaritans. I will be forever grateful to you both for doing so much for Lynne and the other injured.
I will always remember with thanks all the others who helped, most of whose names I will never know: the policeman who chased away the abhorrent tow-truck driver; the emergency medical team at the MediClinic in Stellenbosch who had to deal with what looked like a scene from a battlefield; neurosurgeon Charl Vorster, who is the most unassuming but professional medical practitioner I have yet met; and the many kind, caring and professional staff of ward D at Medi-Clinic.
Lynne escaped with a severely fractured skull and multiple cuts and bruises. Thankfully, she is now on her way to recovery.
Little did we think when we set off for Stellenbosch on Saturday two weeks ago that we would become part of a newspaper headline. Even less so did the Johnson family – Quinten, Clara and their three young daughters – who were on their way to a family wedding. They took the full force of the on-coming truck. Quinten, who worked as a machinist for SA Distillers in Stellenbosch, was killed when the truck smashed into his door.
The lives of Clara and her brave daughters have been changed fundamentally. They suffered serious injuries, but these will be nothing compared with what the future holds without their main breadwinner.
Later that day, five more people were killed in another head-on accident at the exact spot on that black ribbon of death that claimed the life of Quinten. I do not know who they were and how many people will be affected by that accident.
I do know that there will be misery. I do know that there will be financial hardship. I do know that the lives of many people will be different now and into the future. I do know that it could easily have been you and not Lynne, and not Quinten.
All those killed and injured that day were part of a headline in the Cape Times on Monday morning. Newspaper headlines are how most people think of motor vehicle accidents: impersonal; things that happen to other people. Most of us believe that we will die in old age and plan accordingly, but the reality is that many of us in our violent and often lawless society will die prematurely.
I have asked myself a number of questions over the past two weeks, including how many of us will not die peacefully and how many of us who are not “youthfully immortal” will prepare for the unexpected. The answer to the second question is very few.
LIFE ASSURANCE ESSENTIAL
Last year, Personal Finance published the results of research by Due South Actuaries & Consultants that showed that South Africans are dramatically underinsured against untimely death and/or being unable to work because of serious disability.
In other words, most of us believe that we will not meet untimely deaths, that we will not leave our dependants with insufficient financial resources to maintain their standard of living and that we will not condemn the people we claim to love to a lifetime of misery.
For the past two weeks, I have been criticising the life assurance industry for some of the inferior, expensive investment products it sells. Do not confuse this criticism with risk life assurance, which provides financially should you die prematurely or be unable to work as a result of a severe disability.
In your financial planning, risk life assurance comes before anything else, particularly if other people depend on you. At least once a year, you should check whether you have enough risk life assurance.
You may be fortunate enough to belong to an occupational retirement scheme that has risk assurance, and you may think that this risk assurance will be sufficient. The bad news is that in most cases it will not be enough, particularly if you have dependent children.
OTHER THINGS TO CHECK
There are other things you need to check, such as:
Have you drawn up and signed a will? Dying without a will creates all sorts of problems.
Have you named or updated the beneficiaries of your life assurance policy? Even if you have, check them again, because I have come across too many cases where life assurance salespeople have named themselves as the beneficiaries.
By naming your beneficiaries, the money will be paid directly to them, providing them with cash immediately after your death. Your estate will not pay executor’s fees on the benefits, because the money will not be paid into your estate.
Have you named or updated the beneficiaries of your retirement annuity fund and/or your occupational retirement fund?
Although the fund trustees make the final decision on how your benefits will be allocated, you can speed up the process by naming your dependants and beneficiaries on the beneficiary nomination form.
Have you considered setting up a testamentary trust, which will come into existence on your death to protect your children’s financial interests, particularly if both their parents die simultaneously? Such a trust may make all the difference to the financial security of your children.
You could easily be the next victim of an out-of-control meat refrigeration truck. I did not think I would be and neither did Quinten Johnson.
Finally, I would like to say to everyone who sent messages of support to me and my wife in particular that we really appreciate your concern and your thoughts. Thank you.
Cameron is the author of Retire Right (Zebra Press), which is available in good book stores.