File image: Man appears in regret. (Independent UK).

This article was first published in the 3rd quarter 2017 edition of Personal Finance magazine.

CAPE TOWN - In the face of tough economic times and political uncertainty in the country, you shouldn’t panic, but, on the other hand, you need to look at ways of protecting your income and your lifestyle. There are insurance products specifically designed to do this.

Liberty’s group executive of sales, distribution and bancassurance, Johan Minnie, says that while the economy is sluggish and the country is experiencing high levels of uncertainty and social and political unrest, you need to make sure that you are protected to weather the storm.

It’s in times like these that professional financial advisers show their real worth. A financial adviser will help you to identify your aspirations, create a plan to help you grow your wealth and ensure that you remain focused on your goal along the way.

Minnie says Liberty regards wealth as being about much more than just money.

“Our financial advisers are there to help you take control of the things that matter most in your life and to shape solutions that are aligned with your needs and circumstances. At Liberty, we we know the difference a good financial adviser can make in the lives of our customers.”

He says that although you are probably concerned about your finances, you should not make drastic decisions. This is the time to tread carefully, batten down the hatches and protect your money and lifestyle as far as possible.

Minnie says that now more than ever it is important for you to take risk cover seriously. 

“Too many South Africans think about assurance as a grudge purchase, when it really acts more like an investment that cashes in when uncertainties arise and risks become realities. The last thing you should be doing is cutting your risk cover while you wait for ‘the storm to pass’,” he says.

Apart from the essential pillars of risk protection, which are life cover, disability cover and critical illness cover, you may consider retrenchment cover and policy protection cover.

“Loss of income and policy protection during a recession are essential. Business expansion slows because consumers spend less and businesses struggle,” Minnie says. “Retrenchments increase dramatically and unemployment becomes a serious problem. Being retrenched is not only emotionally challenging, it is also financially disabling.” 

Retrenchment cover protects salaried earners against financial loss as a result of a retrenchment. Liberty’s benefit pays out a monthly sum of a maximum of R30 000 for up to six months (after a one-month waiting period) or until you find a new job. 

Policy protection cover gives you the peace of mind that even during adverse times, when you can’t pay your premiums, you will continue to be protected. Liberty’s premium protector retrenchment benefit pays the premiums on an assurance policy for 12 months if you are retrenched and cannot find new employment within a month of losing your job. Once a claim is paid, it will be paid for the full 12 months even if they are re-employed before the end of the 12-month period.

So to avoid regret, have a chat with your financial adviser – and find one if you don’t have one. You’ll be glad you did.

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-  PERSONAL FINANCE ONLINE