Article by Andrew Merryweather
In 2006 I was involved in a brutal assault which left me paralyzed from the neck down. Thankfully through years of intensive therapy, I am now able to use my arms and hands, but it has been a very long and costly journey.
It is incredible how life can change in a second, and the path you had planned out, and envisaged takes a complete change in direction.
I was woefully financially unprepared for the mountain of medical expenses and lifestyle adaption bills that followed.
No one had warned me that ‘self-insuring’ (saving your funds to cover one’s self) is generally not a good idea. All my funds were used up within the first month. The cost of the operation alone was well over R100 000. This operation entailed inserting part of my right hip bone and a titanium plate into my neck. Consequently, this was the beginning of the hundreds of thousands the tally eventually would become. These events caused tremendous financial strain on my immediate family, which I realize now was a very selfish thing to do.
I now know that financial well-being divides into wealth protection and wealth creation. The latter is the more exciting of the two. Buying shares, stocks, etc. and watch your wealth grow over time, without the former (wealth protection) you are building your ‘balance sheet’ on very shaky grounds. Just as building a house or building starts with a strong foundation building your wealth requires adequate risk insurance. We can all agree that these are grudge purchases, but it is very irresponsible to overlook them.
My journey would have been so much easier If I had the correct risk policies in place. My financial portfolio should have included medical aid and Gap Cover, Income Protection, Disability Cover, and Critical Illness. Taking adequate wealth protection is the first step in ensuring financial well being. These ‘tools in our toolbox’ is at our disposal when we are creating a sound financial plan for our clients.
Medical Aid
Most people are familiar with medical aid cover and how it works. Acceptance into a medical aid scheme cannot decline. The medical cover range from low-cost hospital plans to comprehensive in and out of hospital benefits.
Gap Cover
There is often a shortfall between the amount medical aids will pay and what your medical bills are. It is more often the case that you will require consultation of a specialist. Having adequate gap cover takes care of any shortfalls that there may be. There are varies levels of protection under this type of insurance.
Income Protection
Your income is crucial to your financial independence – even more so if you have a family or dependents. Income protection generally pays out a percentage of your salary monthly until the age of 65.
Disability Cover
This type of coverage generally pays out a lump sum with no further payments. This cover divides into occupational disability insurance, functional impairment cover, permanent and temporary disability cover. As with all insurance, your level of protection will determine your monthly premiums.
Critical Illness, also known as Dread Disease cover
The consensus with regards to this is it is not a case of if you contract a dread disease instead when you contract a dread disease. Statistically, everyone will fall ill to some illness. Ranging from cardiac to cancer-related to an ailment less life-threatening. Generally pays out the full value of the policy on diagnosis and is to make funds available for lifestyle adaptions although there are no restrictions on how you use the money.
At Autus Private Clients, we research and compile a financial plan for our clients. Wealth protection is part of what we take into consideration to ensure that we provide our clients with a complete detailed financial analysis of what we recommend for them.
Please feel free to contact any of the Wealth Advisors at Autus Private Clients if you would like a financial needs analysis done.
Andrew Merryweather, is a Wealth Advisor at Autus Private Clients.