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Tailormade Life Insurance
 
Most life insurance products are sold as a “one size fits all” solutions, but the truth is that your needs differ significantly from the person next to you. Your life insurance needs also change drastically depending on the stage of your life.
The traditional way we look at life insurance needs to change.
 
Let’s look at a few examples:
1. Two characteristics of property debt are:
a. It has a defined term (e.g 20 years)
b. It decreases over the term.
2. Financial needs for your children:
a. They usually need financial assistance until age 24 (defined term)
b. The capital needs also decrease over time
 
Let’s look at Traditional life insurance:
1. It is prised for the whole of life.
2. Usually has an annual increase.
 
Clearly the characteristics of traditional life insurance is contradicting the characteristics of two of the most common life insurance needs.
 
We, therefore, have to rethink whether traditional “one size fits all” life insurance is a suitable solution to our needs that change regularly and have different characteristics.
 
Luckily there are a few insurance companies that have created products that specifically match your different needs. The biggest benefit with this approach is that you only pay for insurance that you need, and that it is prised correctly for a specific term, and not over the whole of life.
 
I, therefore, challenge you to revisit your insurance products and consider whether your products are tailormade for you or whether you might be paying for something that you may not really need.
 
Heinrich Coomans | CA(SA) | CFP ® is a director at Affluence Group and specialises in Investments, Personal and Business Insurance. For any questions please contact him at heinrich@afgroup.co.za or 084 586 9509