Good health care is not always easily obtainable and quickly becomes a costly experience. Many people who have health cover policies sometimes expect to have more cover than their policy actually includes, and they are saddled with high shortfall bills; they land up paying the difference between the medical cover rate, and the cost of the specialist.

This is because having medical aid doesn’t necessarily mean that you will be fully covered for all treatments. This is because, every year, medical aid providers establish a base rate that can be charged for all procedures, and your medical aid plan will pay a percentage of this rate. A good plan can pay up to 300%, but many specialists or private hospitals charge more than 300%, which can often result in a shortfall that needs to be covered. For example, if a surgeon charges 350% of the base rate and your medical aid covers 300%, you will end up with an additional 50% that needs to be paid.

What is gap cover?

Although small, adhoc amounts can be manageable if a non-urgent issue arises, an accident or the sudden onset of an illness can leave you with no time to save, and you can be left needing to cover a hefty shortfall.

To protect yourself in the event of an emergency, gap cover can be as important as medical cover. Gap cover could be considered as a top-up medical insurance that is designed to pay the difference (the gap) between what a private doctor charges and what your medical scheme pays.

You can only take out gap cover if you already have medical aid, but only one policy is usually required to cover a member and their dependants (as long as they are all on the same scheme with the same options). It can, therefore, work out very affordable if you have several dependants.

What is covered?

Although premiums can still be relatively cheap and benefits can be extensive, times are a-changing when it comes to gap cover, so it’s important to be aware of exactly what is covered. According to an article published on Fin 24, gap cover insurers have needed to curtail their expenditure to remain financially viable in the face of increasing private healthcare costs. After all, insurance schemes are run for profit, and gap cover is an insurance product that complies with the regulations of the Short-term and Long-term Insurance Acts, rather than those of the Medical Schemes Act of 1998.

Gap cover used to pay the difference between what your medical scheme paid and your total medical bill, which meant that even if you had the cheapest hospital plan, you would be covered in full if you had gap cover. However, this also meant that the largest share of medical costs often fell on the shoulders of gap cover providers, instead of medical schemes. Gap cover providers have been known to carry up to 80% of costs, and such heavy shortfalls have meant that full gap cover payment is no longer often sustainable in the long-term.

Consequently, many gap cover providers have introduced new calculations as to how much of the co-payment they will cover, through a match-pay system based on your medical scheme. Depending on your policy, some providers agree to pay up to five times what your medical scheme has paid, while others will only pay up to twice the amount. So, if your bill comes to ZAR20,000, of which your medical scheme will cover ZAR5,000, your gap cover will pay ZAR10,000 if it pays twice the medical scheme contribution. You will still then need to pay ZAR5,000 by yourself. It is, therefore, worth having a medical scheme that pays out as great a percentage as possible of the base tariff, as this will affect how much will be covered by your gap cover too.

It’s also important to note that gap cover will only cover the shortfall on approved specialists or procedures, so it won’t cover something that is excluded by your medical aid plan. Although having gap cover is still highly worthwhile, it’s best to ensure you are informed about what your gap cover policy will likely not pay for, such as upgrades to a private room, wheelchairs or crutches, and cosmetic procedures. Do also read the fine print because there could be some delicate nuances, such as dental treatment may be provided, but only in hospital.

Given all the exclusions and new calculations, it is important that you have a detailed understanding of what your medical aid covers and how your gap cover will work in conjunction with this. If you have any health concerns, the last thing you need to worry about is whether you can afford to receive the appropriate help, so it’s advisable to be as extensively covered as possible when it comes to medical treatment in South Africa. Don’t hesitate to arrange a meeting if you wish to discuss whether you can afford to put (or not put) your family on a gap cover plan.

Towards the end of every year, many medical schemes announce their annual contribution increases for the following year. This makes these last few months of 2018 the perfect time to review your cover and make any necessary amendments, as, until the start of December, most medical aid providers will allow you to change plans or options without penalties.

Alternatively, if you are not happy with your provider, you can even go as far as to switch medical schemes, just be prepared that a new scheme may come with a waiting period of up to six months (during which time you will only be covered for emergencies), and may also charge you higher premiums or penalties, depending on your age and circumstances.

Your medical cover requirements can easily change from year to year — financially and medically speaking — so it makes sense to take this opportunity to review your plan and understand how you are currently covered and whether that is still appropriate. Granted, it’s hard to predict how much you may incur in terms of future medical expenses, so it is difficult to know which plan to choose. However, that is why it’s important to review your medical cover annually to ensure that your plan is in line with your health concerns and budget.

If you aren’t sure about whether you should change your options, start by first calculating how much of your medical expenses over the past year was covered by your medical aid. Once you have worked out this amount, you can then decide whether it would work out more cost-
effective to pay a higher monthly contribution in return for more benefits, or switch to a cheaper option and simply pay more out of your own pocket if the need arises.

If you are relatively young and healthy, you hopefully won’t require much medical attention next year, so it may be worth considering a low-cost option. However, if you are older, suffer from a condition or have a precarious family medical history, it may pay to upgrade.

Money issues

As contribution increases for medical cover tend to be above the Consumer Price Index inflation rate each year, affording adequate cover can be a concern for many people. The good news is that medical schemes and day hospitals are trying to collaborate in order to tackle the high cost of healthcare in South Africa. Procedures at a day hospital are less expensive and you can avoid any unnecessary overnight stays that can end up adding a lot to the bill.

It’s also a good idea to make the most of any opportunities that your medical scheme offers to improve your general wellbeing. Most schemes nowadays offer wellness programmes and reward you for living healthily. If you can be proactive and stick to a programme, the benefits can compensate for some of the costs of your cover.

If funds are currently tight for you, be sure to at least have a hospital plan, which will cover you for certain chronic conditions and hospital admissions. By law, even the most basic of medical schemes should also provide Prescribed Minimum Benefits (PMBs) that will ensure you are covered if you have a life-threatening or chronic condition that is on the PMB list. However, you may need to meet certain requirements before some schemes will cover you.

You could also choose a network option, which is cheaper but means you will be limited to certain healthcare providers within a network. This means that if your nearby hospital or GP isn’t a member of the scheme’s provider network, you may need to change doctors or be prepared to travel further to have an operation or see a specialist. However, the cost of some network options is calculated based on your monthly earnings, so they will come with lower premiums if you’re not currently earning a comfortable salary.

You could also choose an option with a medical savings account, whereby up to a quarter of your monthly contribution goes into the account and the full savings amount for the year will be available from January. Once you have depleted the funds in your savings account, you will need to fund any further medical expenses. So if you don’t feel that a savings allocation will be sufficient to meet your needs, you may be interested in getting threshold cover, whereby any unused savings each year will roll over.

If you do wish to consider changing plans or options, be sure to thoroughly review all benefits and conditions. Take the time to understand how your cover will change, and it’s advisable to contact your provider to clarify all details. For example, if you change to a lower-cost option, it’s possible that you may no longer be covered for certain medication or treatment, such as antidepressants or anxiety medications; or you may be covered for a different brand of medication to that which you previously used.

Don’t hesitate to also arrange a meeting to discuss your financial situation so that you can decide what steps you can afford to take with regards to your medical cover.

(Info from iol.co.za)

“Without mental health there can be no true physical health” – Dr Brock Chisholm, the first Director-General of the World Health Organisation (WHO)

Dr Brock Chisholm was a psychiatrist who asserted the notion that mental and physical health are linked, and an increasing amount of evidence highlights the impact that mental illnesses — particularly depression and anxiety — can have on physical health. Even though this may be the case, policy unfortunately still continues to lag behind when it comes to addressing mental health issues in South Africa.

Wednesday, 10th October marks this year’s World Mental Health Day, which will focus on young people and their mental health. Presented by the World Federation of Mental Health, the goal of this day is to raise awareness about mental health issues and encourage people to help those dealing with such issues.

Statistics show that approximately a third of South Africans will suffer from a mental health condition in their lifetime, which can affect a person’s capacity to maintain relationships and a job. However, the stigma attached to many mental health issues makes it even more difficult for those affected to get the help that they so vitally need, which causes further problems — be that physical, social or financial.

One of the first steps in dealing with mental health issues is to quash any ill-informed and damaging attitudes. This can be done by raising awareness as to the facts, so that we can develop a better understanding of the problems that so many people face. Once it is widely recognised that a mental health issue is a valid medical issue, we can set about further identifying causes and working on better solutions.

Mental Health and Medical Schemes

Being diagnosed with a mental health condition can be unnerving, and understandably comes with questions regarding treatments and long-term prognosis, as well as what will be paid for by medical aid. However, the Director of the South African Depression and Anxiety Group (SADAG) notes that “individuals accessing mental health and psychiatric services are frequently uninformed, not only about what services are offered, but also about what to expect from mental health and psychiatric professionals. Mental health and psychiatric patients frequently complain that they haven’t been told their diagnosis, what the medication they have been prescribed is for, or what to expect from the medication. “

There have been some disturbing issues with medical aid schemes in South Africa, as psychiatric patients often haven’t enjoyed the same rights as those with more general medical conditions (in both the public health sector and by private medical aid schemes).

Although some medical aid providers have tried to make changes to their plans, it is still often the case that not all medical conditions are afforded equal consideration. It’s important to understand that a psychotic episode can be compared to a heart attack in its unpredictability and debilitating nature.

However, psychiatric medications are prescribed less readily than medications for heart disease, and some medical aids only cover 15 outpatient visits each year or three weeks of hospitalisation for patients with mental illnesses.

Costs can become quite substantial when it comes to treating a mental illness, and many patients who have found the right treatment are unable to afford it. Sadly, the majority of people in low to middle-income brackets don’t receive any treatment for severe disorders. It is a Catch-22 situation in that a mental illness can severely impact someone’s financial productivity, leaving them in a situation where they don’t have the necessary funds to treat their condition in order to be able to function properly and earn money again.

This World Mental Health Day, it’s important to know your rights when it comes to the treatment you are eligible to receive for a mental health condition. Your expectations should be in line with what your scheme offers, so don’t hesitate to arrange a meeting if you have any doubts.

Medical schemes currently have Prescribed Minimum Benefits (PMBs), which provide access to a basic minimum of health services, regardless of the chosen plan. These are a feature of the Medical Schemes Act to ensure that medical schemes fully cover the costs related to the diagnosis and treatment of emergency and chronic conditions. Even a hospital plan should offer PMBs, although a medical aid provider can have certain conditions to obtaining these benefits.

Try to set aside some time to familiarise yourself with your scheme’s provisions and protocols, and make any changes if necessary. Prioritise both your mental and physical well-being, and don’t underestimate the prevalence or effects of mental health conditions.

Information for this blog was sourced through leadsa.co.za.

Understanding how your (or your loved one’s) possessions and wealth are treated when you pass away is crucial to how you plan for what will happen to them. This blog is aimed at breaking down an incredibly paper-heavy, jargon-filled process!

When a taxpayer dies, all their assets are placed in an estate, which is commonly referred to as a ‘deceased estate’. Assets can include a property, a car, money in the bank, and even furniture.

Once an executor has completed all the administration and has repaid all the deceased’s debts, the remaining assets will be distributed to the beneficiaries, which can be heirs and/or legatees (a legatee receives a specific asset from the estate, while an heir receives the balance).

Anyone who owns a property in South Africa is forced to comply with South African inheritance laws, and inheritances are governed by The Administration of Estates Act, The Wills Act, and The Intestate Succession Act (yup – paper-heavy!).

There are agreements with certain countries to avoid double taxation in relation to estate duty, such as the UK, USA, Zimbabwe, Botswana, Lesotho and Swaziland.

A brief overview of estate duty

Estate duty is a tax on the transfer of assets from a deceased estate to beneficiaries and, as of February 2018, the rate of estate duty increased from 20% to 25% on estates worth more than ZAR30 million.

A person is liable to pay tax on all income that they receive or accrue up until the time of their death, and an executor will act as the representative taxpayer to settle any outstanding debts. The deceased estate can be tallied up from the date of death, and all assets will be held by the estate until the account has been inspected and finalised. Once this has been done, the assets will be either distributed amongst the heirs or delivered to the trustee.

An estate worth less than ZAR30 million is subject to estate duty of 20%, after a deduction of ZAR3.5 million against the net value of the estate has been taken into account. For example, if the total net value of an estate equates to ZAR4.5 million, an amount of ZAR200,000 will be liable to be paid in estate duty (20% of ZAR1 million, which is the amount exceeding ZAR3.5 million). Generally, the executor will take care of paying the estate duty, but there are times when the beneficiary pays the duty directly.

Inheritance vs. donations tax

The good news is that you don’t need to pay tax on any money that you inherit, as an asset inherited is a ‘capital receipt’ and is not included in your gross income. You also won’t have to pay Capital Gains Tax on an inheritance as, if CGT is applicable, it is usually paid by the estate.

In terms of taxation, an inheritance is treated differently to a donation and a gift. Companies or trusts are exempt from paying tax on up to ZAR10,000 in casual gifts in one tax year, while South African residents can receive up to ZAR100,000 worth of donations tax-free.

However, any donations above this amount are subject to a donations tax of 20%. So, if you are donated ZAR140,000 (whether in a once-off lump sum or over several donations), ZAR8,000 will be payable in donations tax (20% of ZAR40,000, which is the amount exceeding ZAR100,000).

When it comes to property, donations tax is payable at a flat rate of 20% on the value of a donated property. However, donations exceeding ZAR30 million are taxed at a rate of 25%; and only the first ZAR100,000 of property donated each year is exempt from tax.

It is the donor’s responsibility to pay donations tax when donating property, but if they fail to do so within a set time period, the onus falls on both the donee and the donor together. However, donations tax doesn’t apply between spouses, South African group companies and if donations are made to certain public benefit organisations.

In light of these regulations and restrictions, it’s important to decide how you can best arrange your affairs to ensure you maximise the amount you can give to your loved ones. Don’t hesitate to arrange a meeting to discuss your liabilities and options, so that you can ensure your assets aren’t subject to unnecessary deductions.

Information for this blog was sourced from: http://www.sars.gov.za

Death can be an expensive affair and it is easy to underestimate the costs involved, especially as some unconsidered fees can quickly add up.

As well as the funeral expenses, those left behind can be liable to pay mortgage bond cancellation costs, appraisement costs, Master’s Office fees, legal fees, costs of realisation of assets, bank charges, transfer costs of fixed property or shares, maintenance of assets, advertising costs, probate fees, postage and sundry costs, short-term insurance, taxes on investments, and even duplicate motor vehicle registration certificates…

Estate costs generally fall into two categories – administration costs, which arise as a result of the death; and claims against the estate, which are the liabilities of the deceased.

Generally, the biggest administration costs tend to be the executor’s and conveyancing fees.

However, advance planning can help to cover estate costs or at least reduce them significantly. Here are 6 things you can do now to reduce your estate costs for your loved ones in the future. Don’t hesitate to arrange a meeting to discuss your options.

1. Leave a valid will

If you die without a valid will, your estate will be devolved according to The Intestate Succession Act, rather than in accordance with your wishes. Not only is it likely that some of your assets will not be distributed how you wish them to be, but this process can often be more complicated and come with higher legal fees, as well as the potential for costly disputes.

2. Negotiate the executor’s fee

The devolution of an estate requires an executor to sign off the liquidation and distribution of assets, and confirm that all costs are correct. Once you have appointed an executor, you should try to negotiate the executor’s fee when you are drafting your will. You could either then stipulate the fee in the will or request that the executor confirm the agreed fee in writing.

Depending on the composition of your estate, the executor will quote a fee in accordance with how much work is required, and you could potentially negotiate up to a 50% discount.

If your estate is relatively straightforward — for example, you only have one heir, no business or offshore assets, and sufficient cash to cover all costs, you may find that the executor will offer a big discount.

However, if you do not explicitly specify the executor’s remuneration in your will, it may likely be calculated according to a prescribed tariff of 3.5% of the gross value of all your assets. The executor will also be entitled to a 6% fee on all income earned after the date of your death, and if the executor has registered for VAT, then another 15% will be added to the grand total.

3. Avoid costs of security

According to an article published on Moneyweb last year, “costs of security can be avoided completely by exempting the nominated executor from lodging the bond of security in the will.”

4. Prepay your funeral

Planning and paying for your funeral before you die removes a rather big expense that your family or estate must cover after you’ve passed. By choosing the type of funeral you would like in advance, you not only fix the costs, but you also save your loved ones the difficult job of making decisions and having extra admin while they are in mourning. You can simply pre-pay the money into an insurance fund or trust account where it will sit until the time comes to pay for your funeral.

5. Jointly own property

A simple way of potentially reducing estate costs is to hold assets, such as a house, with another person. When you die, any joint asset should automatically pass over to the surviving owner, so will not be considered part of your estate and subject to probate fees. Do note that probate fees can be substantial, so it is important to factor them into your estate planning.

6. Buy life insurance

If there is insufficient cash to settle administration costs and claims against your estate, the executor will need to approach your heirs to see if they are willing to pay the shortfall to avoid the sale of any valuable assets.

If you don’t have enough funds to cover a bond, think carefully about whether you wish to leave the property to someone specific, as they would have to settle the costs and the property may end up being more of a burden than a benefit. If you wish to bequeath an item to a beneficiary, it is best to do so free from any liabilities, as all your debts must be paid before any money or property can be passed on.

To avoid leaving your heirs in a situation where they are forced to settle outstanding debts, it is important to take out life and/or bond insurance to ensure sufficient cash is available to cover any accumulated claims.

Life insurance proceeds are always paid tax-free, and you can name your estate as the beneficiary, in which case the money will be paid to your estate to cover estate costs. Although your estate will pay probate fees on the proceeds, it will ensure your estate has enough cash to pay debts, taxes and other obligations, so as to avoid the sale of assets that beneficiaries may wish to keep.

Alternatively, you could name a beneficiary for your insurance proceeds, and the money will be paid directly to them. If you do this, the money bypasses the estate process and will not form part of your estate, so will not be subject to probate fees and there won’t be any delay in receiving the money.

(Information gathered from moneyweb.co.za and getsmarteraboutmoney.ca)

Did you know that a trust is not simply: a trust?

There are many different classifications of trusts in South Africa, such as ownership trusts, bewind trusts and curatorship trusts.

Trusts can either be created during a person’s lifetime, which is known as an inter vivos trust, or set up according to a person’s will after they die, which is known as a mortis causa trust.

Different trusts give beneficiaries different rights, depending on how much a trustee wishes to distribute of an income, assets or capital to beneficiaries. And trusts can be used for a variety of purposes, from asset protection to charity. There are also ‘special trusts’, which can be set up for the benefit of a person with a disability, or relatives who are under 18 years old.

Although trusts have been around for centuries, there are many misconceptions that surround them and they have become far less popular in the last couple of decades. The SA Revenue Service (SARS) is arguably partly to blame for the bad reputation that trusts now have, and their continual criticism has resulted in many owners deregistering their trusts and transferring out their assets.

Given that there is a quagmire of misinformation out there, it is important to educate yourself if you have a trust or are thinking of creating one. Here are 5 truths about trusts that may debunk some myths and help you on your way:

1. Trusts aren’t only for the wealthy

Although many people believe that trusts are only for the rich, the best time to set up a trust is actually when you are making preparations to build wealth, before you have accumulated a significant fortune. Registering a trust after you’ve generated wealth could end up being expensive — due to various costs, such as capital gains tax and transfer fees that you will need to pay when you move your assets into trust.

2. Trusts can help with tax planning

A unique feature of trusts is that they allow you to shift tax burdens from the trusts to beneficiaries through the ‘conduit principle’, which, according to the South African Institute of Chartered Accountants (SAICA), means that “if income accrues to a trust and the trustees award it to one or more beneficiaries in the same year, the income retains its nature in the hands of the beneficiary.” This basically results in less taxes needing to be paid.

Even though the sole point of a trust isn’t to save on taxes, you do stand to save on capital gains tax, estate duty, executor’s fees and income tax if you set up a trust and manage it properly. Consequently, SARS is not a fan of trusts, particularly because trusts enable the postponement — and potentially the avoidance — of estate duty in the event of death.

All trusts need to be registered with SARS and the trustee is usually the representative taxpayer of a trust. However, the income of a trust can be taxed in the hands of the donor, beneficiary, or the trust itself.

3. You can still control your assets in a trust

Contrary to popular belief, a trust can be structured in such a way that allows you to maintain a sense of control over your assets. You can legally be both a trustee and the founder, and you can even be a beneficiary, while maintaining the legitimacy of the trust.

4. You can do your own admin

When it comes to setting up a trust, be sure to choose your service provider wisely, as some charge exorbitant fees. If possible, it can be worth doing as much of the administration as possible yourself, so as to reduce costs and ensure that your financial plan is executed as per your intentions.

5. It’s important to read your trust deeds

If you do decide to include a trust in your estate planning, be sure to always take the time to read your trust deeds and to adapt your trusts to any changing circumstances. Many trustees have little knowledge of what is expected of them as managers of a trust. And no trustee can ever claim ignorance if they don’t strictly adhere to the management of a trust deed.

However, a trust will only be investigated by SARS if it is obviously being misused or mismanaged. If it is correctly structured and administered in accordance with common law, the trust deed, and the Trust Property Control Act, a trust is a perfectly legitimate investment vehicle for South African tax residents.

(Information gathered from SARS and IOL)

Each year, about a million people need to stop working due to an illness or a debilitating injury. Yet, according to an article published in The Times, only 10% of people have severe illness cover.

A severe illness is a medical condition that prevents you from leading your normal life, and the life industry covers a wide range of these dreaded diseases and health conditions, from Type 1 diabetes to Parkinson’s disease. However, the ‘Big Four’ — a heart attack, a stroke, cancer or a coronary artery bypass graft — form the core of most policies, as these form over 80% of claims.

A severe illness usually requires regular visits to specialists, treatment, medication, and potential lifestyle adjustments. However, it is possible to survive a severe illness with the right medical treatment and support.

Why is severe illness cover necessary?

A severe illness typically has three phases: 1. Diagnosis; 2. Treatment; 3. Recovery. Your medical aid and gap cover should be able support you through most of the basics of the first two phases, but severe illness cover is designed to support you through your recovery period, which can be expensive and is when you are likely to feel the financial impact of costs that you might not have initially considered.

While your medical aid and gap cover may pay for the direct costs of a severe illness, such as hospitalisation and basic treatment, there may be annual limits. It will also probably not cover specialised treatments, alternative therapies, and rehabilitation; or indirect expenses that arise to meet necessary lifestyle changes, such as taking time off work to recover, making home and vehicle adjustments, or hiring an au pair to look after your children.

Around half of people who survive a severe illness also suffer some form of depression, but one of the most commonly overlooked expenses is the treatment of depression, which can last weeks or years.

Disability cover vs. severe illness cover

If you have already sensibly taken out disability cover, you may think that severe illness cover is superfluous to your needs. However, you would be wrong. While basic disability cover is an important precaution that will protect you in the event of being permanently unable to work, it may not pay out if you are temporarily unable to work due to a severe illness that isn’t terminal.

Many employers in South Africa will pay 30 days of sick leave over a three-year period, but your monthly income will likely be reduced when you have used all of your entitlement. While disability cover will come into play if your income needs to be replaced on a long-term basis, severe illness cover will pay out a tax-free lump sum that you can use to replace any lost income for a short period.

A severe illness policy should also be able to cover anything from overseas treatment, to assistive devices and a home helper. The tax-free lump sum payout can be used immediately in whatever way you choose, so that you can have the best possible treatment and recovery plan, without having to dip into your investments or savings.

The options

Many severe illness policies pay out in tiers in accordance with the severity of an illness. So, for example, if you are diagnosed with stage 4 cancer, which is the most severe form of the disease, you will likely receive a payout of 100% of the sum insured. However, if you are diagnosed with a cancer that has less of an impact on your lifestyle, you may receive a payout of up to 75% of your cover amount. Likewise, if you have a heart attack, your payout will be determined by blood markers and the level of damage to the heart tissue.

If you have this ‘tiered benefit’, you can receive another payout if the illness progresses and becomes more severe. However, if you receive a 100% payout when you are first diagnosed, you cannot claim again for related conditions. If you have a comprehensive policy, you can receive benefits if you suffer a claimable illness that has nothing to do with your first claim. For example, if you once received a payout for a stroke then are diagnosed with cancer years later, you can also receive up to 100% of the sum insured for the second condition. Just do be sure to enquire beforehand as to your insurer’s definition of an unrelated claim, as this can differ between providers.

Whether you choose a stand-alone benefit, or one that accelerates, can also make a big difference to the cover you receive. Accelerated benefits may be cheaper, as they essentially are an early payout of your life cover, but they can also reduce other benefits.

In recent years, there has been an increase in the number of claims for the early stages of severe illnesses, which shows that policyholders are consulting their doctors earlier, thereby greatly improving their chances of successful treatment at a lower cost. Given that it is better to vigilant about your health and seek advice and treatment as soon as possible before a disease progresses, it is very important to opt for comprehensive severe illness cover that allows the flexibility of early payouts.

A comprehensive policy should have a catch-all category that will cover you if you contract a severe illness that does not fall within a specific definition.

If there’s a history of a severe illness in your family, it is advisable to have regular medical check-ups so that you can be diagnosed early if you are affected. An early diagnosis, along with comprehensive severe illness cover, can maximise your chances of recovery. If you have already had a severe illness, you may still be eligible for cover but, depending on the type of severe illness suffered and your age at the time, there may be restrictions, such as exclusion of specific illnesses.

A monthly contribution to a severe illness benefit can significantly ease any recovery or even save your life. Nowadays, over 300 illnesses are covered on some severe illness policies, but the breadth of cover beyond the core four illnesses may affect your premiums. Don’t hesitate to arrange a meeting to discuss the range of options and benefits available.

It is highly likely that one of your biggest assets is your earning power. It is vital to protect this asset and ensure you maintain a steady salary until you have reached your financial goals.

Many people take a head-in-sand approach when it comes to income protection, believing that they’ll never be inflicted with a disability, or assuming they can find a quick resolution if they are. However, this doesn’t necessarily equate to positive thinking, but rather naivety. A more responsible approach would be to hope that disaster won’t strike, while still having a back-up plan in place in case life has other ideas.

The truth is that a lot of circumstances are completely out of our control. And for most people, the reality is that losing a regular income stream (particularly that of the breadwinner) could potentially result in not being able to afford everyday items, such as groceries, as well as larger expenses, such as school fees and bond repayments.

If an unforeseen circumstance arises that prevents you from working, and you haven’t protected your income, you could immediately feel the blow and the knock-on financial effects for years.

Statistics highlighted in an article published on Money Marketing highlight that over a quarter of people will suffer a disability between their twenties and when they retire, and that 10 people per hour have a stroke in South Africa. Unfortunately, anyone can have a debilitating accident or develop a medical condition at any given time, so it’s important to safeguard our financial affairs in order to look after our liabilities and loved ones.

When it comes to disability cover, there are many options, but it’s advisable to choose the most comprehensive cover that you can afford. Fortunately, income protection benefits offer much more holistic protection nowadays, and can cover other claim categories, such as critical illness, hospitalisation and functional impairment. This is of particular note as, in 2017, almost half of the disability claims paid by a leading insurer fell under the classification of functional impairment.

You can easily reduce your financial risk exposure, protect your investments and ensure you can meet all your obligations by investing in comprehensive disability cover. A holistic disability cover will provide you with more certainty, so that you can rest assured that your financial situation is protected in all eventualities. Please don’t hesitate to arrange a meeting to seek advice on selecting the right disability cover for you.

(Info from moneymarketing.co.za)