My personal profile summary and benefits

There’s a lot of confusion about the different policy options available to help you secure your financial future. Which ones do you need? Do you really need them? Why do you need them?

I’ve come across many financial planners who don’t practice what they preach and often do not even use the products they’re selling. Many also do not take the time to reassess their clients’ profiles every year to make sure they are still adequately covered (e.g. due to increase in income), or are not over-covered (due to downsizing, children leaving home, lifestyle changes, etc).

Personally, I couldn’t sell something if I haven’t used it myself or if it doesn’t work for me. Transparency is important to me and I often share my own experiences and product details with clients to help them understand just how much they can benefit from what Quattro and Momentum have to offer.

I’ve just reassessed my own policies and will be sharing the basic details below, not only to illustrate that I actually use the products that I’m selling, but also to explain the difference between them as there is often confusion about the various options available and how they work.

We’re average South Africans

My wife and I are both self-employed with low-risk occupations. We’re also non-smokers, fairly healthy but don’t go to the gym. That being said, we do our best to make healthy day-to-day choices and be as active as our lifestyle and our energy allows All in all, we’re average South Africans, living in an average home in a middle-class suburb, with little spare funds for lavish holidays or extravagant purchases. We live simply and watch our pennies like many other similar South African families. Should any unforseen event cause either of us to be come disabled, diseased, or prevent us from working, we won’t have the extra burden and stress of no longer being able to take care of our financial responsibilities, or losing our home.

Four aspects, one package

If either my wife or myself is critically injured and unable to work, our income is protected. This means that if either of us is disabled in a way that prevents us from performing our income-generating work duties (ie if we lose a hand, or our sight or, or become bed-ridden due to disease), we will receive 100% of our income for 2 years and then 75% of our income thereafter until retirement. Temporary disablement will warrant us a monthly pay-out until we are able to work again. Income protection does not cover retrenchment, in case you were wondering. It only covers illness, accident or injury that prevents you from working for a month or longer.

Having our income protected if one of us is unable to work is all good and well and will cover all our day-to-day expenses. But what about the additional costs of actually being disabled? Things like a home carer or nurse, home medical equipment, wheel-chair friendly home modifications, a modified vehicle, etc, that medical aid or income protection won’t cover. This is where a disability benefit is essential. My wife and I both put aside funds for this as an income protection payout would not cover these additional costs should they ever be necessary. A disability benefit allows you to maintain quality of life and will also ease the burden of your loved ones.

The next part of our policy package is dread disease cover. This is different and separate from a disability benefit. If either of us has a heart-attack, stroke, cancer or other debilitating illness (whether or not we continue to work) – we will receive a lump-sum payout in accordance with the severity of the illness. Again, medical aid only covers your time in hospital. It doesn’t cover specialized treatments locally, or abroad. A friend of ours was recently diagnosed with colon cancer and her extra expenses (over medical aid) amounted to over R300 000 in just 4 weeks. This cost would not have been covered by her medical aid, which is where dread disease cover would have been invaluable. Who wants to be critically ill and still have to deal with a huge debt at the same time? Or worse, not be able to afford the best possible treatment despite having a medical aid policy? If a debilitating disease renders one of us disabled, then we would claim both disability and dread disease as both require separate expenses.

[Note: dread disease cover is different from gap cover which provides for the difference between the standard rate covered by your medical aid and the higher rates charged by specialists.]

Lastly, if either of us dies, because we are contributing to a death benefit all debts of the demised partner will immediately be paid, with the living partner receiving an additional lump-sum payment to maintain their finances and lifestyle on an ongoing basis. Although this certainly won’t relieve the stress of losing a loved one, it will at least ensure that stress isn’t impacted by financial problems.

These 4 different aspects are often confused with each other and not understood in their entirety as to why they are all important investments to have. I just want to summarise them for you below:

• Income Protection: pays you your monthly income as long as you are unable to work due to illness or accident.
• Disability Benefit: pays you out a lump sum to cover extra expenses related to being disabled like a regular carer or home/vehicle modifications.
• Dread Diseases Cover: pays for specialised treatment or additional expenses not covered by your medical aid (not gap cover).
• Death benefit: pays off all your debts and also pays your remaining beneficiary a lump sum for ongoing living expenses.

What can you expect to pay?

All of the above, including our medical-aid premiums amount to 10% of our combined income. That sounds like a lot but by taking advantage of the Momentum rewards program, we only pay 4% and still get the same benefits. On top of that we get a R1000 cash refund every month paid into a special account to spend as needed.

It’s human nature to think, ‘but none of these will ever happen to me’, but it has been seen time and again that accidents and illness happen when we least expect it. I’m willing to bet that you or a family member have already been close to someone with cancer, or who has had a bad accident. The stats are horrific and climbing daily. I have personally witnessed family members suffer because they had inadequate or no cover of any sort. And I honestly believe it’s always better to be safe than sorry later on. It’s just money but it can can change your life.

Book a free assessment with me

The new year is the best time to reassess your policies. I’ve just done ours and am happy to say that my wife and I are still adequately covered for our needs and aren’t paying more (or less) than we absolutely need to. If you are unsure what you’re covered for or are looking at ways to save on your premiums, you’re welcome to book a free, no-obligation, assessment with me to have a look at your profile, and to chat about your needs. I will also explain how you can easily take advantage of the available benefits so you can pay less on your premiums and still have sufficient cover in place. Just email dpetzer@qfg.co.za and let me know how I can help you.