Big boy responsibilities...

[shadow_man]

I'm getting older and now that I earn a decent salary I need to take on big boy responsibilities like income protection / medical aid / life insurance. It all seems a bit much gathering quotes / pricing / comparing different quotes (it feels like comparing apples with pears as no two are the same...)

Can anyone recommend a way to make this easier? Seeing a broker perhaps? If so who? I'm based in Cape Town.

Thanks,
J

 

[chrisc]

Make sure the broker is FIAS approved and has a registered number. Also, not one committed to one ins co. I have a few leads if you want to PM me, but I have no financial interest in what they do, I have just found them to be reliable people who provide accurate advice.

Income protection is not all that vital (unless you are self-employed) and do not go overboard with life insurance and get one that includes accidental injury. Medical Aids are normally provided by your employer anyway. If not, consider a hospital plan rather than a full medical aid, as you never see any of the premiums back and unless you have dependants (wife + several children!!!) it is a waste of money.

 

[shadow_man]

Hi Chris,

I'll PM. Thanks.

J

Make sure the broker is FIAS approved and has a registered number. Also, not one committed to one ins co. I have a few leads if you want to PM me, but I have no financial interest in what they do, I have just found them to be reliable people who provide accurate advice.

Income protection is not all that vital (unless you are self-employed) and do not go overboard with life insurance and get one that includes accidental injury. Medical Aids are normally provided by your employer anyway. If not, consider a hospital plan rather than a full medical aid, as you never see any of the premiums back and unless you have dependants (wife + several children!!!) it is a waste of money.

 

[Nerfherder]

Ye.. Don't pile it on all at once, if you are young and starting out then you don't need to spend a lot

You need life insurance if you have debt or responsibilities like a wife and kids. So if you have a bond then they will have already made you get life insurance.
When you are young and healthy then you just need a Hospital plan, if you have the cash then start medical savings... increase it as you need.
Income protection is also mainly for if you have responsibilities but it can be a good idea, still the least most important thing (Medical aid > life insurance > income protection )

I assume you have pension ? The sooner you start the better, I started with R500 pm. Also... don't blow the budget on the amount you contribute now, it only really has a benefit when you are in the higher tax bracket.
Savings that you can access are a lot more important now... later on the bigger pension contribution is more important.

 

[InTheCube]

Listen to A Word on Personal Finance on Radio 702 or 567 CapeTalk at 8pm every Wednesday. Stream it online if you're not within a radio coverage area.

Lots of useful advice, especially for young people. I've learnt a hellova lot about investments, retirement funds, tax, shares, unit trusts, etc. from this show. I only listen to it because I happen to be in the car with the radio on every Wednesday at 8pm, and 702 is about the only radio station I listen to (and can tolerate).

 

[Skydrops]

I'm getting older and now that I earn a decent salary I need to take on big boy responsibilities like income protection / medical aid / life insurance. It all seems a bit much gathering quotes / pricing / comparing different quotes (it feels like comparing apples with pears as no two are the same...)

Can anyone recommend a way to make this easier? Seeing a broker perhaps? If so who? I'm based in Cape Town.

Thanks,
J

Disclaimer: Just tips, not advice, if you choose to follow it, you agree not to hold me accountable, for any thing. :erm:

Id say only use guys from this list, I use to be in the industry.

Beware of thumb sucked advice.

Make sure your broker has a CFP.
Look for a proper degree or Postgraduate diploma in insurance.

Find them here: See here

Ask to pay the broker a small upfront fee for the initial time and advice, then the rest on an "as & when" commission's bases, that will encourage the broker to service you in the long run.

You can also negotiated the % of commission paid to the broker, seeing as you are paying a small bit upfront and you sought out the broker, you can ask him to reduce his charge if he wants your business.

Ask him to use software like spotlight or Xplan for a proper affordability & needs analyst.

With this, you can see what you need most likely. Then ask him to priorities the findings based on your profile.

Your short-term & medical aid will be "as and when," but make sure your long-term is as well.

I personally liked Old Mutual and Sanlam's products the most, not sure which medical companies but I can point you to a medical broker who can assist you.

Any broker worth his salt, would be able to justify the price differences in products he is quoting you. Then spend time to point out the small print.

It's not like buying apples at P&P, one is cheaper possibly due to having a worm in it, so watch out.

Also if it's an independent broker, in the event he did some thing wrong and you wish to sue him... make sure his fsp will be able to cover the cost or even better, exist after his death and has insurance.

Your broker(Registered Financial Planner) should be your life long partner, untill one of you die. Avoid advisors/advisers they are like the freshmen.

Get qoutes from more than one guy, be upfront with this, and tell him you'll be asking for other broker's quotes. These quotes should not not just be based on the the price, but also for the advice justifying the price.

You paid them upfront for their time so they won't mind so much, and will have incentive to try and win you over, and by showing the quotes to different brokers you may be able to hear the different opinions and advice.

Also ask the broker to print out his own ITC/Transunion report for you, if he is willing... his going to look through your financial profile, so check out his.

I my self would get;

Future cover(Go big), Disability cover, sever illness cover, income protection, medical aid, and life cover split-ted into smaller sub baby policies to use as security for finance, loans, house, etc. Retrenchment cover is also nice to have, and there are so many options and various insurance products. Don't forget your short-term...

You really need to sit down with a proper planner and spend money on proper advice, rather than "believing" that you are covered and living in a dream world's house made out of glass...

There's a reason this industry is so big, insurance is crucial for the long run.

I stress, get proper income protection if it is relevant to you.

Disclaimer: Just tips, not advice, if you choose to follow it, you agree not to hold me accountable, for any thing. :erm:

 

[akescpt]

who has a decent income protection policy?

 

[Skydrops]

who has a decent income protection policy?

Disclaimer: Just tips, not advice, if you choose to follow it, you agree not to hold me accountable, for any thing.:erm:

I had the privileged, during this year, to have a looked at a few companies' products...

They are "needs & your profile" dependent, as each person's profile may be different.

You should consider the tax implication on the products you choose as well, some of the cost you may be able claim back. Should your broker not be able to explain in detail how the tax works on these products, run for the hills... and get a better one. You may even not know it, but you can claim a big sum back on various products... basically getting part of it for free in a way, that or the tax man get's your cash.

Things that go wrong often, may go wrong often with you, and ICP is a VERY nice product to have. What happens after your sick leave runs out, will you be paid, will you have enough savings? You must ask yourself, will you be fired or retrenched for not showing up to your work for 6 months, will you have cover in place?

What happens if you have a minor heart attack, and get book off work for a week or two, or own your business?

Your income, then health is the first things Id look at. People also forget a good medical aid, may only cover about 1/3 of the actual cost of a sever illness related condition or temp/full disability or even less.

I can't vouch for any "companies'" products, but one thing I can advise you with is to have a very close look at the cut the middle man out companies' products... you know these, over the internet, tele-marketer, TV guys etc. I think you may be shocked if you do comparisons with products, what they actually are, how they function, and actually understand what you are reading...

There is a reason a certain company had an add saying they are "real genuine insurance."

Beware of the industry, as far as I can recall, they had no apple for apple names standard, you may find one company uses a "name" of a product that is completely different to it's competitor's product with the same name.

Disclaimer: Just tips, not advice, if you choose to follow it, you agree not to hold me accountable, for any thing.:erm:

 

[Cius]

If you have a 4 year degree then only consider PPS for life and disability cover. Their cover is better and none of the other companies have the Surplus Rebate Account (SRA), which is in essence an RA you get for free out of company profits. Other companies keep profits where PPS is more a mutual scheme where members own the company. I typically get back 60%-80% of what I pay in to PPS each year into my SRA. If you are not lucky enough to qualify for PPS then make sure to get quotes from a few places and if you don't like the advice of one financial planner feel free to quote some others. Above all else check what fees they charge you on long term savings products. They can take ridiculous up front and ongoing fees if you let them.

 

[Skydrops]

If you have a 4 year degree then only consider PPS for life and disability cover. Their cover is better and none of the other companies have the Surplus Rebate Account (SRA), which is in essence an RA you get for free out of company profits. Other companies keep profits where PPS is more a mutual scheme where members own the company. I typically get back 60%-80% of what I pay in to PPS each year into my SRA. If you are not lucky enough to qualify for PPS then make sure to get quotes from a few places and if you don't like the advice of one financial planner feel free to quote some others. Above all else check what fees they charge you on long term savings products. They can take ridiculous up front and ongoing fees if you let them.

+ 1
PPS is superb, in my opinion.

 

[shadow_man]

I've got 50% of a bond on a house (brother owns the other half). SA Home Loans never made me take out life insurance, only building insurance on the premises...

Ye.. Don't pile it on all at once, if you are young and starting out then you don't need to spend a lot

You need life insurance if you have debt or responsibilities like a wife and kids. So if you have a bond then they will have already made you get life insurance.
When you are young and healthy then you just need a Hospital plan, if you have the cash then start medical savings... increase it as you need.
Income protection is also mainly for if you have responsibilities but it can be a good idea, still the least most important thing (Medical aid > life insurance > income protection )

I assume you have pension ? The sooner you start the better, I started with R500 pm. Also... don't blow the budget on the amount you contribute now, it only really has a benefit when you are in the higher tax bracket.
Savings that you can access are a lot more important now... later on the bigger pension contribution is more important.

 

[Skydrops]

I've got 50% of a bond on a house (brother owns the other half). SA Home Loans never made me take out life insurance, only building insurance on the premises...

So what happens to your estate after your death?

Did your brother sign for the responsibility of taking over the debt in event of your death?

One of the purposes of life cover is to protect your estate, and what about the transferring fees to your beneficiaries?

 

[TheShadow]

I would say a medical aid with a minimum of a hospital plan is a must.
Life cover is only needed if you have dependents.
Income protection is very important but also tends to be quite pricey the more you earn. PPS is the best in this.

@Cius : Regarding the SRA, my broker told me that if I had to cancel my S&PI cover I would lose all the value in the SRA. Is this true? I was under the impression that only a portion would be forfeited?