Life Insurance – Does it have a place?

I was at a friend’s house recently celebrating our rugby world cup victory and what a win it was! We were all in high spirits and excited about our future. Finally, something positive to come out of South Africa. Everyone was celebrating, hugging, there were tears and we were all over-joyed by our successful team. The world was once again our oyster.

“What could go wrong” to quote a well-known insurance company advert. With all the festivities I turned to chat to one of my friends who I hadn’t seen for ages. “How are you doing?” He had been diagnosed with cancer a couple of years ago and was in remission. I was expecting to hear that he was still in remission, but he informed me that he had gone for his regular check-up and a new mass had been discovered. He was scheduled to start a cycle of chemotherapy this week.

I was devastated as I had chatted to him previously about the benefits of life insurance. Even a group life policy from his employer, but unfortunately he didn’t have cover. If he had a dread disease benefit on his life insurance then a claim would have been paid.

Having worked in life insurance claim departments for many years, in my previous life, you encounter people who have had life changing events. You talk to them over the phone, you listen to them cry and vent, you provide a shoulder and a hug when required. It’s a scary situation to be in, as it’s the unknown, it’s no longer “what if” as its now a reality and your life changes. There is no book out there on how you will cope with the situation or how you will personally react. Having something in place, like life insurance, to take away some of the burden; stress; anxiety does help. It doesn’t offer a complete explanation, but it does offer support so that you can concentrate on yourself and your loved ones, and that is what is important.

Life insurance is expensive especially as we teeter on junk status from Moody’s. People are cutting back, and are exploring how they can save money, which is understandably very important.

However, life insurance should not be viewed as a luxury but rather a necessity. Life insurance should pay in those instances when you are diagnosed with a medical condition like cancer, heart attack, stroke, loss of hearing etc. The payment from a life insurance benefit can assist with the medical bills, when you need it most. For example, when losing a loved one, becoming disabled in a car accident and many other unforeseen circumstances.

In today’s world, the cost of medical treatment is on the increase, a good example of this is our medical aid increases for next year, they are higher than inflation and have been for some years already. Treatment is often only offered overseas, or on the cutting edge of medical sciences, and who has that kind of money nowadays?

I have been a risk specialist for over a year now have helped with many successful claims. We currently have two open claims pending. One of the successful claims we fought for, was a higher payment from an insurance company. The insurer was only going to pay 25% for a medical condition that met 100% criteria. They wanted us to go quietly but we made sure that the correct payment was made for our client.

According to current statistics, South Africans are living longer, but we are one of the unhealthiest nations in the world. This means that we may survive a life changing event however, would we be able to cover the costs of the treatment required following a medical condition, like a heart attack, stroke, cancer etc.

Life insurance has become a grudge purchase with a bad reputation in the financial services industry, however it shouldn’t be this way. There is a huge lack of trust towards insurance companies as it appears as if they hide behind jargon and legalese, which is unfortunately true in some instances. However due to the increasing pressures of social media, insurance companies have had to live by the polices surrounding “treating customers fairly” in their product offering which means that they are becoming more transparent, and client friendly. As clients are cutting back on their expenses, there is fierce competition for business amongst insurance companies. This can only result in a “win-win” situation for clients as prices become more affordable.

That’s why consulting with a Financial Adviser can assist you with understanding what life insurance actually is. What benefits are available within a life insurance product and what each benefit covers. A Financial Advisor can explain what is available in the market, which your current needs are, and together you can establish what is important for you.

As risk specialists, we will ensure that we assist you with any claimable events from any insurance company to make sure that you are getting value for money.

Life insurance should not be a ticked box, it should be an investment.

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