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28 May 2018. Article by Heletje Dalton

Most people overlook the importance of life insurance and many people that do have life insurance are underinsured. As we grow older our circumstances change. We get married, buy a house, start a family and maybe a business. It becomes essential to incorporate life insurance into your financial planning.  The big question is, what will the financial impact be for my loved ones if I should pass away?

The reasons why we need life insurance:

Providing your dependants with an income.

If your family depends on you financially, it is imperative to have life assurance, as this will replace your income in the event of your death. If you are the sole or main income earner, it will be difficult for your family to maintain the same standard of living. They will also need income for household expenses, education and all other financial obligations. Life insurance will cover all of this and in addition also offers an opportunity to set your children up for a solid financial future.

Settle outstanding debts and covering funeral expenses.

Having life insurance will also ensure the payment of outstanding debts, including mortgage bonds, car loans, credit cards, income tax, estate duty etc. Life insurance will also cover all the funeral costs. Life insurance can also be used to cover any shortfalls in your estate.  In short, your family already suffering from a physical loss, will have peace of mind knowing that you had the foresight to ensure that they will not be financially burdened for many years to come.

Business cover.

Many South Africans are entrepreneurs, have their own business or are shareholders in a company. You may have signed as surety for a company liability or taken a loan with a bank to start your own business. Life insurance will provide protection against these liabilities. If you are a shareholder or a partner in a business, you and your partners or fellow shareholders will need a Buy & Sell Agreement together with the necessary life insurance which will enable a seamless purchase of a deceased partner’s share of the business in the event of one of the partners untimely death.

The reality is that we do not know what life holds in store for us in the future. It can happen today or anytime in the future. But it will eventually happen. Life assurance will never replace the person, but it will provide financial security for those left behind as well as protection for the uncertainties of life. As your life changes and life events happen, your life assurance portfolio must be reviewed and adapted on a regular basis.

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Morebo Financial Solutions (Pty) Ltd, an affiliate of Liberty, the Liberty Group Ltd is an authorised Financial Services Provider in terms of the FAIS Act. (No. 2409)
Morebo Wealth (Pty) Ltd, an affiliate of Liberty, the Liberty Group Ltd is an authorised Financial Services Provider in terms of the FAIS Act (no. 2409)
Morebo Brokerage (Pty) Ltd is an Authorised Financial Services Provider in terms of the FAIS Act (no. 48360)

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