Each December holiday season South Africans are confronted with increasing road fatality statistics. According to the AA 14,071 people died on South Africa’s roads in 2016, that’s a 9% increase from 2015 when 12,944 deaths were recorded.
Unfortunately, this upsurge in accidents and increased risk on the roads, as well as heightened alcohol-related incidents, also coincides with a tendency to let insurance payments lapse due to poor financial planning and overspending.
Insurance is, of course, a month-to-month purchase. And for many a grudge purchase at that. There is no accumulative good will – so late payments, short payments or no payments at all simply means that your cover falls away, irrespective of how many years you’ve paid. Allowing that to happen poses a considerable risk at any time during the year, and especially during high-risk holiday periods.
Your trip – be it by road or air – to your ultimate holiday destination is just one risk-laden voyage at this time of year. It is compounded when you get to your new location with a tendency for holidaymakers to throw caution to the wind and try out heart-racing extreme sports, such as wind surfing, water skiing, paragliding, bungee jumping and mountain climbing – thereby placing themselves at an increased risk of injury, disability or even death. This makes having insurance like medical aid cover of huge importance, especially for breadwinners who hold the future of their families in their hands.
Of course, ensuring that you are up-to-date with your financial obligations requires keeping a vigilant eye on your monetary situation. But, with the end of year fast approaching, many lose interest in the tedium of keeping tabs on financial matters, including ensuring they have sufficient funds to cover vital insurance payments.
That said, the end of year is the ideal time to take stock of your financial obligations and review your financial plan. Failing to do so can result in severe financial consequences should something unforeseen happen to you, your loved ones or your assets during this period.
It is for this reason that the advice and guidance of a qualified financial advisor is so important. Having someone in your corner who can work out the right plan for your individual circumstances, and make sure that you don’t overextend yourself, is essential. You should, for example, speak to your advisor about ensuring that you have at the very least enough cover for your gross monthly income. Then, in addition to this, it is advisable to have between five to 10 times your annual earnings in life cover.
Having a plan and acting on it – even if it is not optimum – is better than having no strategy at all. It will give you peace of mind that your family and assets are well protected, enabling you to relax and fully enjoy the festive season.
John Marsden, Managing Director: Citadel Financial Protection