RAISING a family is a dream for many couples in Mzansi.
But there are many considerations couples need to work out before rather than later and insurance is one them.
Lee Bromfield, CEO of FNB Life, said that when arranged properly, insurance is a tool that maintains financial stability if disaster happens.
He said that while life cover cannot take away the pain of a loved one’s death, the survivors can use it to make sure that the family remains financially secure.
“The policies can be extended to beneficiaries who are financially dependent on the breadwinner.”
Lee told SunMoney that the type of policy and amount it covers needs to be determined by the size of the family as well as its immediate and long-term needs.
Couples who have big families are more likely to select inflation-linked policies that increase cover amounts every year.
He also said married couples should consider the type of marriage contract they agree to. The risk often lies with uninsured or underinsured couples who are married in community of property as they share all the assets and liabilities.
“In the event of death, the surviving spouse could be left to deal with the dead spouse’s debt, death taxes, legal fees, the loss of income and other financial issues.”
Couples need to review and update their policies regularly according to how their lives and finances have changed – new children mean a complete policy overhaul.
“If you are planning to start a family, consult your bank or financial adviser to work out what life cover is best for your family based on its structure, size and unique needs,” said Lee.
