In the event of your death, are you leaving others with a financial burden or can you rest assured that your life is covered!
If you have any form of debt, you should have life cover and it should be sufficient to settle your debts and care for your loved ones as if you were still there. It needs to be the salary that is no longer.
Life cover is tax free and will pay out to your nominated beneficiary or estate, depending on your situation.
Your family will battle enough without you there, don’t let them have to worry about how to pay for houses, cars, school fees etc as well.
You may have read through the life cover section of this website and thought well I don’t have debt or any dependants so I don’t need any life cover…so while you may not need a death benefit can you be guaranteed of not becoming disabled? You probably all know about someone who is unfortunate enough to be disabled and we guarantee you they didn’t see it coming and neither will any of us. So what can you do to make sure that there are funds available to cover you in this event?
1) Occupational Disability Benefit
2) Income Protection
Pays you a lump sum should you become permanently disabled. If you add a waiver of premium to your policy it would mean that when you are at claim stage the company you are insured with will pay your policy premiums from then on. You can be covered to age 70 for disability.
75% of your income can be insured and will be paid to you monthly in the event of you being disabled. There are varying waiting periods and insured terms that affect the premiums of this policy. The bonus is the premium is fully tax deductible.
DREAD DISEASE (AKA TRAUMA COVER / SEVERE ILLNESS)
Dread disease cover provides a lump sum – tax free benefit that becomes payable in the event of you getting any of the severe illnesses like cancer, a heart attack, stroke etc. These events strike without warning – just because no-one in your family has had a dread disease it doesn’t mean you are safe! This cover pays on diagnosis and could provide you with immediate income for the extra expenses you could incur in the treatment of the disease.
There are various savings mechanisms that can be utilized depending on your needs:
1) Endowments - you commit to a monthly amount that is put away for a certain term – this can be on a monthly basis or a lump sum, or a combination of the two.
This pays you an amount at the end of the term, or you could select to extend the term with or without contributions. This policy can be used as security against a loan.
2) Education Plans – based on an endowment these work the same, but are specifically to assist you with education costs
3) Unit Trusts – This is a more flexible savings mechanism where you can stop and start payments without the penalties you would have on an endowment type product. You are also able to sell your units when you wish. A very cost effective route of saving.
Your needs will dictate which product is most suitable to you. You are also able to invest in International Retirement Annuities or International Endowments, so your money is invested offshore. A tax clearance is required for this, which is a very easy process done by your financial advisor, but your tax must be in order.
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