“I’m sure it won’t happen to me, but what if…”
By Nicholas van Der Nest: Divisional Director - Risk Products, Liberty Life
Financial security is something we all strive for. Whether you reach retirement or have a family that you would like to leave a legacy to, or are dependent on a life cover payout should a loved one pass away – having an income to maintain your lifestyle is imperative for everyone. Life’s ‘what if’s’ are plenty to grasp and many of us do not prepare for those unexpected events. The thought of losing a loved one is hard to fathom, but picking up the pieces to regain stability (financial and emotional) when your loved one is no longer with you, is even harder to deal with.
There are so many scenarios that you or a friend may relate to, for example; a bread-winner friend who may have died in a car accident; or perhaps a neighbour who lost both their legs when hit by a drunken driver. Life is unpredictable and things unfortunately do go wrong. Because of this, it is imperative to have adequate cover to ensure that you can continue a lifestyle similar to what you had before disaster struck through an accident or illness.
We don’t like to think about bad things happening, especially when it involves our families. The reality is that one small event can unravel a lifetime of hard work. And whilst insurance may be viewed as a grudge purchase, for those whose lives were changed by it, every minute that was spent deciding which plan to choose (and each cent spent towards the premiums) was time (and money) well spent.
In 2007, Simon Milner*, an author and editor with more than 25 years’ experience, started experiencing pain and stiffness in his hands while working. After consulting specialists about the pains, it was discovered that he was suffering from osteoarthritis. Although Simon only had a few years to go to his retirement, he was passionate about his work and was determined to work for as long as he could. Unfortunately, in 2011, his condition had worsened to the extent that he was simply unable to perform at his job.
Fortunately for Simon, he had taken out loss of income protection cover, which covers illnesses such as osteoarthritis should he be unable to work. He was paid his full sum insured from his policy to the value of R500,000.
“In 2011, Liberty paid out R2.6 billion in claims - R2 billion on life cover, R327 million on income protection claims, and R266 million for critical illness claims,” says Nicholas van Der Nest: Divisional Director - Risk Products, Liberty Life. “For most of us, these are probably meaningless numbers. But let’s look beyond the numbers and think about what it means for those families who received a payout - a lifeline through the safety net provided by sufficient financial protection.”
“Mr Milner’s case is an example of life throwing a curve ball and demonstrates why it is so important to ensure that you have the necessary cover.” He adds, “By providing high-quality advice, our accredited financial advisers help Liberty keep its promise of paying all valid claims and protecting you from life’s uncertainties.”
For the R2 billion of life cover claims paid in 2011, we have the following major causes of claim:
· Motor vehicle accidents – 9%
· Murder and suicide – 10 %
· Respiratory conditions – 11%
· Cancer – 24%
· Cardiovascular conditions – 27%
For the R266 million of critical illness claims paid in 2011, the main causes of claim were:
· Rheumatoid Arthritis – 3%
· Stroke – 5%
· Cardiac claims – 28%
· Cancer – 38%
Income protection (disability and monthly income disability) claims of R327 million were paid out in 2011, for the following main causes:
· Cardiac claims – 9%
· Mental illness – 10%
· Cancer – 10%
· Skeletal claims – 14%
· Trauma - 19%
It is important to protect your lifestyle. The last thing you want is to be financially dependent on a family member or to not be in the position of being able to look after a family member after an accident or illness. Ensuring that you have adequate risk cover in place ensures that you and your family will be financially secure should life’s what if’s happen to you.
*Names changed for the protection of identity
Fleishman-Hillard | Digital. Integrated. Global.
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