With the pace things are changing around us, it is important sometimes to reflect upon some of the things we know we need, but do not always have the facts. Hence we are unable to make the correct decisions around our future planning and the correct product choices to make to ensure we and our loved ones are fully protected into the foreseeable future. We are aware of this and have put together this informational article relating to some of the facts and information related to Assistance benefit products that will hopefully equip you more meaningfully in planning your future over the next couple of years.

Assistance products have been given a special dispensation under the long term insurance act, in that they provide for expenses incurred immediately at the time of death of an individual. These expenses incurred are made up of some of the following items:-

  • Day to day living expenses of the surviving partner
  • Monthly accounts that need to be paid
  • Groceries
  • Funeral Expenses
  • Function Costs
  • Electricity
  • Petrol
  • Etc

Reality check.  At the time of death, the following can happen which you might not be aware of:

  1. The bank account of the deceased person is frozen and the surviving family cannot access immediate cash, remember Estate Duty needs to be calculated before the Estate can be finalised, this means all assets and liabilities of the Estate need to be wound up before the Executor is able to release any significant portion of the funds. This point is even more important if you have joint bank accounts.
  2. Are your children financially strong?  A death in the family can have a great influence on your children’s financial situation and an extra lump sum for a funeral might just push them over the limit.  Your family will always want to bury you with dignity and will hardly ever short change your funeral, you need to understand that, just think of what happened, if you have had the misfortune, when your parents moved on to a better place .
  3. Today the cost of a basic funeral easily exceeds R18 000, a cheap funeral even worse will cost approximately R12 000. These costs need to be provided for and in most cases the undertaking groups require the cash immediately.  Can you imagine the cost in 5 years?  Make sure you have enough cover.
  4. Assistance benefits do not form part of your Estate and are bequeathed via your application form directly to your beneficiary. As they do not form part of your Estate, they are not subject to taxation or Estate Duties. The maximum limit for Assistance benefits is R30 000, this can help to alleviate the tax burden for your loved ones when having to pay the aforementioned costs.
  5. Assistance benefit premiums are determined based on your age.  The sooner you start planning and making provisions, the cheaper your monthly premium.  You will really struggle to find sufficient cover or any at all over the age of 80 years so start NOW!
  6. Most financial products require medical questions or examinations.  Assistance benefits rarely require medical questions or examinations and acceptance are guaranteed.
  7. It makes sense to ensure you have this vital cover in place

What a sombre subject?  But one thing we know for sure Death and Taxes, are part of our lives, as we plan our annual taxation and prepare well to ensure we benefit in the best possible way, so should we ensure we have done all that is necessary pertaining to mortality!  It is imperative to plan ahead and to make sure that your life partner or children are not left in financial distress on top of the grief related to the death of a loved one.

Included in our financial solutions are an option to buy up additional covers, just to ensure your surviving relatives are made comfortable through this traumatic period. Click here to view our variety of value added services.