Why life cover shouldn’t be a grudge purchase
Jenny Ingram, Head of Product Development at Momentum Life Insurance
One thing that the pandemic has taught all of us over the last couple of years, is the fact that life can take unexpected turns at any time. Losing your job, falling seriously ill for lengthy periods or falling victim to an injury, are all eventualities that can happen – no matter how much you try to avoid it. Knowing this, do you believe that income protection insurance, health cover and life insurance should be priorities or not?
Jenny Ingram, Head of Product Development at Momentum Life Insurance, points to the fact that the South African life insurance market is expected to grow by at least 4%, as more consumers begin to take up financial products that can take care of them and their loved ones in times of crisis.
“It is interesting to see that, since the outbreak of the pandemic, life insurance seen a surge in interest. Where most people used to see these types of products as a grudge purchase, the fact that so many of us are now faced with uncertainty, is clearly changing the way that people look at their risks.”
Momentum Life Insurance data provides a picture of just how necessary life insurance has been for so many of its clients during the pandemic. The statistics show that COVID-19 was the cause of 42% of Momentum’s death claims in 2021, this was followed by cardiovascular claims at 20% and cancer at 17% of total claims. “In fact, Momentum Life’s third biggest claim pay-out was for R66 million for a COVID-related death.”
Still, she states that the COVID-19 pandemic shouldn’t be the only reason why more people change their thinking around long-term insurance. “Keep in mind that cancer is still the dominant cause of critical illness claims (at 44%), followed by cardiovascular (20%) and nervous system complications (at 12% of claims). One of the primary functions of life and disability cover is to provide financial security and wealth protection to your family and other beneficiaries when you no longer can. The fact of the matter is that any of the above-mentioned conditions can severely affect your ability to take care of your loved ones. It comes down to the fact that you shouldn’t take your own insurability for granted. It is crucial to take action and make sure that your loved ones can continue to live their lives if anything happens to you.”
With this in mind, Ingram outlines some of the most essential pieces of cover that every person needs to have in their lives:
1. Critical illness and disability cover
Serious conditions like cancer, severe heart disease or any neurological conditions are not only difficult to treat, but can also devastate a family’s finances. This is why it is important to have cover in place that can pay for you to access the latest medical treatments and access private healthcare.
2. Life Insurance
Should the worst happen, you must be able to provide your family with financial security for their future. Whether your family needs help to pay off a mortgage after you’re no longer there, or if you want to make sure that you can provide private education for your children, a life cover payout will make sure that your loved ones are looked after.
3. Income Protection
Aside from medical treatment, it is important to remember that serious injuries or illness can also prevent you from generating an income for your family. Income protection cover provides you with a regular monthly income for the time that you might be unable to earn an income yourself.
In closing, Ingram points out that while the COVID-19 pandemic has clearly brought the value of having the right cover to the fore, it is vital not to forget this lesson once the pandemic has passed. “The time to act is now. You have to ensure that you and your loved ones are properly covered. If you already have cover, take the time to review it and be certain that it is at the right level. Even more importantly – never let it lapse. Speak to a financial adviser to secure your financial dependents future while you still have the opportunity,” she concludes.