What is risk cover and why do you need it?

By Henk Meintjes Time of article published Apr 15, 2019

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You may have heard the term risk cover thrown around in conversation. But what is it really? At Liberty , risk cover is long-term insurance that provides financial protection in the wake of major life events such as critical illness, disability, retrenchment or death. 

The true value of risk cover is often only experienced when one is confronted with the reality of an event which requires an insurance claim.


Through the payment of a monthly premium, you can insure your own life and those that are financially dependent on you. As a business, you can even insure a specific individual or business partner. In turn, the insurer will pay an agreed amount, referred to as the 'sum assured,' should a claim event occur. The premium is based on individual risk profiles which are determined by the insurer prior to the uptake of the policy. 

There are four main personal risks that long-term insurance addresses: 

Critical illness: If you are diagnosed with a critical illness, such as a heart attack, cancer, stroke, Alzheimer's and Parkinson's, you will receive cover against medical and other necessary lifestyle adjustment expenses involved.

Disability: If you are disabled through an accident or illness and are unable to earn an income, you will receive financial cover to compensate for the loss in earning ability.

Retrenchment: If you are retrenched from your job, this cover will protect your income for a certain number of months immediately after, giving you a buffer to find new work.  

Death: If you pass away, your family will receive financial security.


The purpose of risk cover is to provide for loved ones and other dependants if you die, however, many people overlook the fact that your expenses will not disappear if you are unable to work. Disability and critical illness cover should therefore be in place before there are any dependants to protect. 


There is no ‘one-size-fits-all’ option with risk cover. A single working professional requires very different risk cover to a new parent. Consultation with a financial adviser or a broker is essential to ensure you have the cover you need.  

Ultimately, risk cover helps secure you and your family’s lifestyle by removing the financial burden if you face an unexpected life-changing event. A Liberty financial adviser or broker will be able to advise you about Liberty's comprehensive risk cover.

* Henk Meintjes is Head of Risk Product Solutions at Liberty

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