Staying in control is essential in these extraordinary times, especially when it comes to your personal finances.
Against a backdrop of COVID-19, we focus on how risk cover protects you and your family. We share tips on how to invest in times of market turmoil and the financial mistakes one should avoid. We also give reasons why you should not cancel your medical or gap cover.
The National Treasury has temporarily changed the living annuity drawdown rates, so we look at how retirees can preserve their capital. Drawing on the latest report from the Ombudsman for Short-term Insurance, we share some of the reasons why insurers repudiate vehicle insurance claims.
By acting rationally and seeking qualified advice before making financial decisions, you can avoid taking unnecessary risk and keep your financial plans on track.
Your risk cover and COVID-19
Risk cover provides you and your family with security and protection, so it is important to know how your risk is covered in the context of COVID-19.
Life cover provides cover in the event of death. By nominating a beneficiary on your policy, your beneficiary can be paid the proceeds within 48 hours.
As COVID-19 can result in a lengthy period of illness, check if your income protection policy has temporary disability benefits. If so, you can start submitting claims should you become ill – after the waiting period.
Click to read about other risk policies in the context of the coronavirus.
To reduce your cover and/or premiums, or opt for premium relief, please ask me for advice.
Rethink your drawdown
Retirees may temporarily change their drawdown rate until 31 August 2020, regardless of the anniversary date of their living annuity.
If you can afford a lower income from your living annuity, or if you have retired early, it is best to reduce your drawdown rate to the minimum of 0.5%. This will help preserve your capital.
If you are not making ends meet with your income, rather review your expenses and cut back where possible. Increasing your drawdown should be your last resort.
Click to read more about the National Treasury’s temporary changes for retirees.
If you would like to discuss your retirement income, please contact me.
Investment advice to see you through the crisis
Market downturns are part of the investment landscape. Here are tips to navigate through market downturns and keep your eyes on your goal to build wealth and retire comfortably.
It is better to stick to your long-term strategy instead of trying to time the market. Before converting your assets to cash, consider that money is not risk free, even in a low inflation environment. Equities have also historically outperformed other asset classes over the long term.
If your returns are under pressure, you may need to increase your contributions or invest for longer to reach your investment goal. The worst thing to do right now is exit the market.
Click to see how else you can keep your investments on track.
To discuss your investments, please contact me.
Know what your policy covers
Paying premiums for your vehicle cover does not necessarily mean your claims will be settled. It is your responsibility to maintain your vehicle and abide by the policy terms and conditions.
To ensure claims are paid in full, your policy should include cover for credit shortfall, as well as financed accessories that may have been added to your insured vehicle. Be sure to disclose all the relevant details to the insurer and do not misrepresent facts.
If there are important changes that can influence the contractual agreement between you and the insurer, you will need to inform the insurer, or they may reject your claim.
Click to read other reasons why claims are rejected.
Please contact me if you wish to review your vehicle cover.
Reduce risk with medical aid and gap cover
Cancelling your medical cover to reduce your monthly expenses could harm you down the line and lead to ongoing financial difficulties.
Medical cover is a necessity, especially in light of the coronavirus. Besides COVID-19, accidents and other diseases remain a possibility for which medical treatment could be necessary.
Without adequate medical cover, a cancer diagnosis or potentially fatal event like a heart attack could lead to medical expense shortfalls that erode your savings. Without gap cover, you could end up in debt if your savings are depleted and you have an unexpected medical expense shortfall.
Read more about why you should keep your medical cover.
Need more affordable medical cover? Contact me for options.
Avoid making financial mistakes
While COVID-19 disrupts the world, it is vital to apply discipline to the way you manage your money. Here are some financial mistakes and how you can avoid them.
Don’t stop investing. By disinvesting now, you lock in your losses, but if you stay invested you could benefit when markets recover. Also don’t cancel your insurance, as you would expose yourself and your family to greater risk. Don’t take on unnecessary debt and avoid using credit to cover your living expenses.
If you need financial advice, don’t ask family or friends. Rather speak to me and I will assist you with how best to cope with the least damage to your financial goals.
Click to see other financial mistakes to avoid.
Please contact me if you would like me to review your financial situation.
Take caution when investing your money
The Financial Sector Conduct Authority (FSCA) continuously urges consumers to check the credentials of a financial services provider (FSP) before buying products or services from them.
To do this, go to the FSCA’s website and search the list of authorised financial services providers.
Another useful check, is to search through the FSCA’s media releases to see if they have issued any public warnings about the FSP or purported FSP.
I hope you find this newsletter useful, and please feel free to contact me if you have any questions. I especially want to encourage you to contact me if your situation has changed in any way so I can review your risk and investment needs.
Tel no.: 0829233702
Physical address: 30 Imbuia Street White River 1240
Looking forward to hearing from you!