At a tricky time in the world when everyone is worried about money and trying to save on monthly bills, there are a few important costs you can’t afford to skimp on. Having insurance for some key areas in your life is one, as the consequences of not having your ducks in a row can result in a big financial outlay if things unexpectedly go wrong.
“It may be tempting to cut back on costs like insurance, but don’t let your monthly payments on important insurance policies lapse,” advises Carl Coetzee, CEO of BetterBond. “If the pandemic has shown us anything it is that we all need to prepare as best as possible for the unexpected.”
1. Life insurance
If there’s one insurance that’s proved its worth during Covid-19, it’s been life insurance. In the past, people have often viewed it as a grudge purchase, however the pandemic’s toll on mortality, illness and unemployment has undoubtedly highlighted the value of having life insurance. For example, when someone with a home loan that has life cover attached to it has passed away, it has meant that their spouse and children have been able to remain in the family home.
“Unexpected illness or death places a financial burden on your family during a difficult time,” says Coetzee. “Life insurance ensures that your bond and other personal loans are taken care of. But make sure that the life cover you choose offers you a variety of benefits. The BetterLife Protection policy, which is underwritten by Old Mutual Alternative Risk Transfer Limited (OMART), includes death cover as well as optional disability, dread disease and retrenchment cover, and offers whole-of-life insurance that covers you well beyond the term of your bond, even when fully paid up.”
2. Building insurance
A burst geyser is something every homeowner dreads. It has to be repaired immediately and is an expensive bill - made even higher if the home’s roof, carpets or furniture were water-damaged in the process. Even worse is flooding or a fire taking place in your home, resulting in expenses that can be sky-high to shoulder if you don’t have home insurance.
“Your home is probably your most expensive investment and most valuable asset, so you have to make sure you’re insured against theft, damage and even natural disasters,” says Coetzee
Having home insurance to protect the structure of your home is a requirement when applying for a bond - it is often automatically added to your bond instalment so check this with the bank and ensure you are happy with the policy and premium. You are also entitled to shop around for your insurance cover and decline the bank’s policy.
Cover for structural damage will extend to the replacement of geysers, fixtures and other repairs. If you live in a complex or apartment building, check to make sure which home repairs your insurance covers, and what the body corporate has committed to fixing.
