Make sure your fi­nances are in or­der be­fore brav­ing the coun­try’s roads

Weekend Argus (Saturday Edition) - - GOODPOSTER - BRUCE CAMERON

’Tis the sea­son to be merry – but it’s also the sea­son of tragedy. South Africa’s roads, more than at any other time of the year, turn into black rib­bons of death and se­ri­ous in­jury over the next two months.

By the end of this year, some 130 000 in­come-earn­ers will have lost their lives, while an es­ti­mated 43 000 will be to­tally and per­ma­nently dis­abled. Many of th­ese ac­tu­ar­i­ally pre­dicted cases of death and dis­abil­ity will be the re­sult of road ac­ci­dents, Peter Dempsey, deputy chief ex­ec­u­tive of the As­so­ci­a­tion for Sav­ings & In­vest­ment SA (Asisa), says.

Dempsey says that, with a week be­fore cor­po­rate South Africa shuts down for the hol­i­day sea­son, now is a good time to re­flect on your per­sonal fi­nances. He says life and dis­abil­ity cover should top your pre-hol­i­day fi­nan­cial check­list. You need to en­sure that you:

You should en­sure that you have enough death and dis­abil­ity cover, he says.

“As an in­come-earner, it is your re­spon­si­bil­ity to make sure that your fam­ily is looked af­ter fi­nan­cially should you die. In the case of dis­abil­ity, the ad­di­tional fi­nan­cial im­pact of hav­ing to care for the spe­cial needs of a dis­abled fam­ily mem­ber no longer able to earn an in­come is of­ten un­der­es­ti­mated.

“If you do not have life or dis­abil­ity cover, you must see a fi­nan­cial ad­viser. It is im­por­tant that you de­cide on the right level of cover with the help of a trusted fi­nan­cial ad­viser, as your de­ci­sion will be in­flu­enced by how much you can af­ford to pay in premi­ums, your num­ber of depen­dants, your life­style and your debts.

“If you do have life as­sur­ance poli­cies, meet with your fi­nan­cial ad­viser to re­view the cover. Most peo­ple un­der­es­ti­mate how much life and dis­abil­ity cover they re­quire,” Dempsey says.

En­sure that you have com­pleted the ben­e­fi­ciary nom­i­na­tion forms for your life poli­cies, Dempsey says.

“If you do not spec­ify a ben­e­fi­ciary, your life as­sur­ance pro­ceeds will form part of the es­tate. Since your bank ac­counts will be frozen on death, your fam­ily will have to wait some time be­fore they re­ceive money, and only af­ter all debts have been re­paid by the es­tate.

“If you do have a ben­e­fi­ciary nom­i­na­tion in place, the life as­sur­ance com­pany will pay out within days, pro­vided the nec­es­sary doc­u­ments have been sub­mit­ted and no foul play is sus­pected in the cause of your death,” Dempsey says.

Check with your fi­nan­cial ad­viser or life com­pany whether you have pre­vi­ously com­pleted a ben­e­fi­ciary nom­i­na­tion form. If you have, en­sure that your nom­i­na­tions are still rel­e­vant and that the per­cent­ages of the pro­ceeds to be al­lo­cated to each of them are cor­rect.

The Pen­sion Funds Act states that the trustees of a re­tire­ment fund must con­sider all a mem­ber’s depen­dants, to­gether with his or her nom­i­nated ben­e­fi­cia­ries, when al­lo­cat­ing a death ben­e­fit.

“When you nom­i­nate ben­e­fi­cia­ries for your pen­sion fund or re­tire­ment an­nu­ity, make sure you put down the names of all the peo­ple who are fi­nan­cially de­pen­dent on you. This will speed up the process of dis­tribut­ing the ben­e­fits and en­sure that those who did de­pend on you fi­nan­cially con­tinue to re­ceive fi­nan­cial sup­port. If your ben­e­fi­ciary nom­i­na­tions are in­com­plete or not up to date, it can take the trustees up to 12 months to fi­nalise a pay­out,” Dempsey says.

◆ Dempsey says you will cre­ate com­pli­ca­tions for your depen­dants if you die with­out a will.

“If you have chil­dren, give care­ful thought to what should hap­pen to them if you and your part­ner are killed at the same time. While this is one of the most dif­fi­cult sit­u­a­tions to think about, it is also one of the most im­por­tant. Of­ten, this de­ci­sion will af­fect your ben­e­fi­ciary nom­i­na­tions,” he says.

◆ You should com­pile a list of the peo­ple who your fam­ily should con­tact in an emer­gency – one of whom should be your fi­nan­cial ad­viser.

Com­pile – and reg­u­larly up­date – a con­sol­i­dated record of the de­tails of your life as­sur­ance and short­term insurance poli­cies, in­vest­ments, bank ac­counts, home and per­sonal loans, and med­i­cal scheme mem­ber­ship, Dempsey says.

Make sure that fam­ily mem­bers know where to find this record.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.