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Getting your insurance affairs in order: All you need to know about insurance

Photo: File

Photo: File

Published Jun 11, 2021


By Dr Nolwandle Mgoqi

IF there is anything that the past year has taught us, it’s that there is no better time than the present to get our affairs in order.

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This is even more vital when it comes to one’s financial affairs. Saving for retirement, getting your will in order, and paying off your debt are just some of the aspects of financial health that most people think about.

However, something that is often overlooked is the importance of ensuring that you are properly insured.

One of the main reasons that consumers shy away from purchasing insurance is they think it is complicated. However, this is a misconception. Grasping the basics of insurance can be simple and once you have accomplished this finding the right type of insurance for your needs becomes easier.

Insurance is designed to protect you from the unexpected, providing you with the peace of mind that you will be covered in the case of an accident or death.

There are various types of insurance for just about every possible event in your life that might need financial assistance.

Firstly, you need to be able to distinguish between short-term and long-term insurance.

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Short-term insurance covers the damage or loss of a particular asset or against a particular event over a period of time while long-term insurance means insuring the life of a person. It refers to insurance directly related to people and life-changing events.

Types of long-term insurance:

Life insurance: The money you leave behind from life insurance can go a significant way to replacing your income for living expenses when you pass away. Life insurance also includes, disability, dread disease and income protection. Consult your financial consultant to help you choose the cover that is right for you.

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Funeral insurance: Whether it is your untimely death or the death of a loved one, burial and funerals can become very expensive. Insurance takes the financial stress and pressure off your loved ones at a time when they are mourning by covering the costs of your funeral.

You decide who you want to cover and for how much, your level of benefits and the amount of cover for you and your family.

Credit Life insurance: is a type of insurance protection that can provide cover for debt repayments in the event of death, disability, unemployment (retrenchment) and dread disease. Don’t leave your debt as your legacy to your family.

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Accident and Health (A&H) insurance: provides a benefit during accidental injury and illness, including death. We can never predict an accident, so the best thing we can do is take some precautions just in case, such as A&H insurance. A&H insurance is not the only type of cover for disability and illness but consists of multiple products like accidental death cover, total permanent disability cover, Cancer cover or hospital cash benefits.

Unemployment insurance: In the unfortunate event that you get retrenched, it helps to know that you have insurance that will assist you and your family with financial security.

Types of short-term insurance:

Home insurance: Home insurance not only covers damages due to fire, lightning, etc, it also covers any permanent fittings inside your house.

Car insurance: Although car insurance is not compulsory, it is important to protect yourself in case of car theft, accidents or fire.

Travel insurance: When travelling abroad it’s a good idea to cover yourself against risks such as unexpected medical costs or lost or stolen luggage.

Insurance should not be something you ignore. Insurance will give you peace of mind that in the event of an accident, ill health or death your finances or that of your family won’t be severely impacted.

Dr Nolwandle Mgoqi, head of Standard Bank Insurance South Africa

*The views expressed here are not necessarily those of IOL title sites


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