What Is Risk Cover?
Risk cover is insurance cover which takes care of the “what ifs” in life. It therefore provides for needs that arise following unfortunate events such as death, disability or severe illness. In all cases the requirements can be addressed in the form of a lump sum (capital) and/or a monthly income to retirement age.
Why Do I Need Risk Cover?
The risk of something unwanted and unexpected happening to you is a fact that everyone should accept and address. Thus the question should be asked: How, or on what, will I or my family, survive financially should my income suddenly and unpredictably cease? Will I or my family, be able to continue with my/our current lifestyle in such a case? The level and type of risk differs from individual to individual, but can mostly be associated with your life stage. The younger individuals risk is more likely to entail disability and will therefore mainly focus on income protection. The older person will focus more likely on estate planning, leaving a legacy and the clearing of debt.
When Should I Start Saving For Retirement?
It is never too early or too late to start contributing towards a retirement savings scheme. The level of contribution will again differ with each individual case, but could be started with as little as R350. The final sum accrued will depend on the underlying funds, the advantage of compound interest and the term of contribution. An effective way to determine the amount to be contributed towards a retirement scheme is to draw up a detailed retirement plan based on the income required at retirement, whilst a further consideration should be the duration of the payment term, commonly the life expectancy of the insured.