Risk Planning


In essence, risk planning is in place to protect your ability to accumulate wealth, despite negative health events potentially stopping your ability to keep working. And investment planning is about protecting and growing that wealth so that you don’t have to work when you get older. In many ways, they’re both about protecting your income – protecting your ability to earn now, and create an income for you in future years.

Many people underestimate the importance of risk cover in sound financial planning. While many people are proactive about creating a basic will or trust, they often avoid life insurance or do not choose an adequate policy that can protect their loved ones’ financial stability. Much of the reason for this oversight is that people find themselves uncomfortable with the various nuances and details of life insurance policies.

In order to ensure that risk insurance is as effective as you need it to be, you should discuss such policies as part of creating a comprehensive estate plan that ensures your loved ones are protected in the event of your death or disability.

Risk insurance is still a nascent idea and most people do not think about it until a major life change causes them to consider what might happen to their loved ones in case of any unforeseen circumstances. While the main objective of buying a life insurance policy is to protect oneself from unforeseen circumstances, it can also help in wealth accumulation, preservation, and give access to liquidity at the right time, if added as a component of financial planning.

  • Life cover: Life cover provides your family or nominated beneficiaries with a lump sum of money in the event of your death. They can use this lump sum in whatever way they choose. If the policy is ceded as security to your mortgage provider, it is used to pay off some or all of your outstanding mortgage amount . You decide how long you want this cover for (a set period, or until your death) and how much you would like the lump sum payment to be. It should be flexible enough to give you the cover that you need to match your circumstances today, as well as adapt to your changing needs, as they unfold.
  • Disability cover: Disability cover pays you a lump sum amount if you become permanently disabled and are unable to work. You can never tell what life will bring. You may become permanently unwell or injured, and unable to perform the duties of your occupation. The financial burden of illness and injury can be challenging, but disability cover can ease your financial concerns, allowing you to focus on recovering and adjusting to a new way of life.
  • Income disability cover: Your future salary is one of your biggest assets. If you are unable to work and therefore cannot earn an income, your family’s life could be jeopardised. Income protection helps you to be able to take care of them financially, regardless of what life event negatively impacts your income. Income disability cover pays you a monthly income when you are unable to work as a result of illness or injury. Your injury or illness need not be permanent. Various waiting periods are available. You start receiving income after the waiting period and will continue to receive payments for as long as you are unable to work.
  • Critical illness cover: Since 1983, medical advances and a focus on healthy living have extended our lives, and with increased longevity comes increased risk of contracting a severe illness at an older age. International statistics place the lifetime likelihood of suffering from cardiovascular disease at one in two, strokes at one in six, and cancer at between one in two and one in three. There are indications that the South African experience is not far removed from these trends. Although it’s good news that the odds of surviving these diseases are improving, ill health can place a significant strain on a household’s finances, which is where dread disease cover comes in. Critical illness cover offers financial protection against illnesses such as a heart attack, cancer, stroke, Alzheimer’s and Parkinson’s. It also covers injuries from accidents such as paraplegia, major burns and brain damage. It pays out a tax-free lump sum you can use to settle outstanding debts or to pay for the cost of medical treatment and procedures not covered by your medical aid. 
  • Funeral cover: A death in the family is the most difficult time anyone can go through. Those left behind should not have to struggle with the financial burden of the funeral. It can cover the costs of a funeral for you, your spouse, children, parents and extended family, depending on who are covered on the policy. It can also offer double accident cover for the main member and spouse. This offers families the chance to give their loved ones the dignity of a funeral they deserve.
  • Business Assurance: With the increasing number of small to medium size businesses being registered in South Africa, the requirement for appropriate business assurance products and advice is gaining more and more prevalence. Although there are a wide variety of solutions available to accommodate almost all business assurance requirements, the field can be extremely complex and it is critical to ensure that such solutions are structured correctly to avoid adverse income tax and / or estate duty treatment. Ensuring that you have an appropriately structured business assurance plan insures the sustainability of your business against unexpected or unlikely events that could befall business owners and / or key employees.

We can help you structure your risk portfolio, making sure that all your individual, family and business needs are taking care of. Contact Us to set up an appointment.