The past 18 months have thrust a lot of South Africans into turmoil – financial and otherwise. While some may have been prepared to deal with financial emergencies, others believed that they would not have to face such circumstances in their lifetime. Imagine if you could go back in time before Covid-19 hit our shores, what would you have done differently? What plan would you have had in place for the unforeseen? What plan would you put in place to protect yourself and your loved ones against the impact of the unforeseen?
To answer these questions and more, Metropolitan’s Head of Client and Business Solutions, Abulela Gazi, sheds light on how you can protect your loved ones from the unexpected.
Q: How important is it to plan for the unexpected?
A: The past couple of months have created an environment where tomorrow’s uncertainty is part of our daily lives, making planning for the unexpected extremely important. A lot of South Africans might have the necessary funeral policies in place to honour those who pass away with a dignified funeral, however, there is a growing struggle for South Africans to cover the basics such as putting food on the table or children through school, once the breadwinner passes away. Having a plan that ensures that your loved ones can survive should the unexpected happen, is vital.
Q: What steps can you take to plan for the unexpected?
A: Ultimately planning for the unexpected starts with a well-crafted financial plan that includes the right life insurance protection for your life stage. There is a common perception that life insurance is an unaffordable nice-to-have, leaving a large portion of our population underinsured. Protecting your family while you are working should be a minimum for those who cannot afford lifetime cover, to have some form of cover rather than nothing at all. Life insurance protects your family and allows you to leave them with a non-taxable amount at the time of death. The pay-out can be used to sustain the livelihoods of your loved ones, cover your financial obligations and help your family stay protected against the unexpected.
Q: Can life insurance be seen as an avenue to creating generational wealth?
A: Most people associate life insurance with death and very few people are comfortable having a conversation about death – however, there are several benefits to life insurance such as using it as the ultimate gift for the loved ones we leave behind. This helps individuals to participate in leaving a real legacy, help break the cycle of generational poverty and drive the creation of generational wealth. People with life cover have the peace of mind in knowing that that their loved ones can get a financial boost as a platform for them to thrive, or giving their loved ones the opportunity to move out of the poverty cycles.
Q: How important is it to have open and honest conversations about life cover?
A: Within African communities, it is largely taboo to have conversations about money and the same can be said about death. We need to understand that death is a reality and that we must plan for it. If you are no longer here tomorrow, what would it mean for your family? Having these conversations is important and should not only be left to the adults. Both younger and older generations within the family must come together for open and honest conversations. Not only will it benefit the head of the household knowing that there is a plan in place, but that the rest of the family can understand their role and be comfortable in knowing that they will be protected should the unexpected happen.
Q: How can I ensure that I have the right cover?
A: The reality is that only 40% of South Africans have life cover and even fewer understand its importance. The sooner we start planning, the more affordable it becomes to have the right protection in place. With that said, it is advisable to seek out the services of a reputable professional financial planner who will partner with you through your journey. Everyone is unique with their own challenges and circumstances. A qualified financial planner will ensure you have life insurance in place that speaks to your needs and budget.
Access to a qualified financial planner should not be a hurdle for individuals, because they are available across the country. Metropolitan Life, for example, has 4000 advisers, situated at 330 branches, across South Africa.
Proper financial education and planning, particularly at a young age, can help you to be better protected against the unexpected. For more information visit: www.metropolitan.co.za
