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While we're always hoping for the best and trying to remain positive, life is unpredictable and filled with unexpected challenges.
According to many analysts, the economic forecast for the year ahead in South Africa is looking tough, which will only be exacerbated by life’s unpredictable twists and turns. If you haven't already, making urgent preparations for unforeseen life-changing events like death or major sickness is essential because you never know when one may happen. This is according to George Kolbe, Head of Life Insurance Marketing at Momentum.
"Ensuring you're adequately covered for unexpected events is very important. Not preparing can directly affect your financial future."
Make sure your income is protected
Income protection cover can be defined as a long-term insurance policy that supplements or replaces your income in the event of a loss of income due to serious illness, injury, or disability. Income protection aims to safeguard your monthly income should you become temporarily or permanently disabled to protect your financial position.
Consider critical illness cover
Critical illness cover also referred to as dread disease cover, is a lump sum cover that pays out when a person suffers a qualifying critical illness, for example, cancer or heart disease.
"Although critical illness coverage has grown in relevance over the years, it is still not as prominent as it should be, and we still see too many clients with too little or no cover in place," says George.
In 2021, cancer and cardiovascular-related illnesses ranked as the highest causes for claims, highlighting the significance of critical illness cover and prioritising a healthy lifestyle.
Set up an emergency savings fund
Establishing an emergency savings fund is great to ensure you have money to cover more minor emergencies or unexpected financial challenges. A car tyre replacement is just one example of an unforeseen incident that may occur at any given time and requires some instant cash.
"You do not have to save an excessive amount of money upfront. Apply the winning formula by making it practical. Look at your budget and cash flow and commit to saving some money regularly, or whenever you can, to create your emergency savings fund for a rainy day," he says.
Preparing for unexpected life-changing events like death or serious illness is essential and should be done as a matter of urgency if you have not done so already, as these events can happen at any time. For the best possible outcome, it is generally suggested that you approach an accredited financial adviser for a comprehensive financial needs analysis to help you identify financial risks and put solutions in place to address them.
George says not preparing for unexpected events can put your, and your family’s, financial success at risk. Comprehensive financial planning, which includes setting financial goals and protecting them, is the best formula to secure your journey to financial success.
Questions may be edited for brevity and clarity.
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