Tips from a financial adviser to keep your life cover in check

What’s the best way to plan for premium payments before and after the holidays?

Often, as we get wrapped up in all the excitement of year-end, we overspend in December. Then, when January comes around, we don’t have money to pay for things like medical aid, car insurance and life cover.

What I always advise people to do is put aside exactly what they need to cover all their debit orders. When you get paid at the end of November, pay your December debit orders immediately.

If you get paid early in December, ask your insurance provider (like Discovery) to debit your account early. Or, put the money in a savings account so it’s “out of sight, out of mind” until you need it for your debit orders in January.

What advice can you offer that would be helpful in planning for 2022?

You need to go through the six-step financial planning process with a financial adviser.

Part of that process looks at your financial status, and how to match your goals and needs with financial products and services. Your financial adviser will compare and suggest different plans and premiums – all while keeping your income and budget in mind.

So, sit down with an adviser and come up with a plan to make sure you have the right amount of cover.

A big thing for me right now is severe illness and comprehensive disability cover. With COVID-19 and all the other known health conditions linked to it, one of the things you need to look at is making sure your life cover benefits actually do cover what you expect them to.

Should a policy review also include an estate plan audit?

As a professional, what’s stood out for me glaringly over the last few years is that we’re not prepared to die. So now, when I do a policy review with a client, the biggest things I check with them – no matter who they are or how much they have – are: Do you have a will in place? And do your life cover policy, estate planning policy and your will all talk to each other?

When I look at overall, holistic planning, I’ve started bringing in more practical considerations. For instance, if a parent dies, families may lose an income – and not have any money. So, I’ve started strongly suggesting that, as a part of the financial plan, we leave an amount of money to the guardians.

This makes some cash available while a testamentary trust is being set up, for example, and the estate plan is being put in place. Guardians will need this money long before the trust or estate can be finalised – especially if there are delays in these processes, as we’ve seen in recent times.

Discovery Life Limited. Registration number 1966/003901/06, is a licensed insurer, and an authorised financial services and registered credit provider, NCR Reg No. NCRCP3555. Product rules, terms and conditions apply.