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Mind the GAP: The R1.6 million GAP that is costing you
Mind the GAP: The R1.6 million GAP that is costing you
04 Aug 2021

According to a recent report by ASISA, South African earners that are looking to protect their family by maintaining their standard of living even after they have died would need an average of R1.6 million of cover in place.

This means having a safety measure in place to cover the basic costs of daily living expenses, education or paying off of debt that they may have accumulated.

 

But where do we currently stand? The report revealed that the average South African earner has less than R0.6 million in place to protect them from the insurance GAP. This means that when a breadwinner dies their loved ones will face an insurance gap of R1.0 million that is needed to keep them afloat.

 

Under insured and unsure

On a scale of prepared to underinsured, many South African's are faced with a financially looming issue that can be unravelled by a life-changing event that most are not prepared for. 

 

The reality is that the underinsured gap is widened when we take into consideration someone who sustains a disability. With the chances of such a person earning an income being drastically reduced, based on the type of disability they have sustained, they could be looking at a gap of R2.2 million. 

 

The lack of preparation for a situation where a person's life is changed by big changes such as becoming disabled or death can leave many families financially exposed. 

 

The perception that insurance policies are expensive and the delayed reaction time when it comes to starting such safety nets when a person is young and healthy, can prove to be challenging as they get older due to the higher premiums. It may not be too late for many people who are faced with the insurance gap. There is still time to protect your most valuable asset. You.

 

Protecting your ability to earn an income

No one knows what tomorrow holds, but there are steps that you can take to protect your ability to earn an income. You are the most valuable asset when it comes to providing for you and your loved ones. Therefore, knowing what options are available while you still have the means of investing in them can help create a financial safety net. 

 

Ways to get prepared to close the gap

Your financial situation is different from the next person's. Therefore, consulting an accredited financial advisor is the best way to financial management that will be affordable and sustainable for you. However, knowing the basic building blocks you will need to cover you and your family is also possible by having these three crucial covers:

 

Life cover. If you are unsure of how much life cover is enough cover, using a life insurance calculator can give you the answer. You can also look at your current expenses and how much you will need to sustain you and your loved ones each year to get an idea. 

 

Funeral cover. You can get cover from as little as R10 000 - R50 000 or more. MiWayLife also offers life cover that comes with a built-in funeral policy under one premium so you can have the best of both worlds.

 

Disability cover.  Disabilities can affect anyone with people as young as 25 years old having an 86% chance of sustaining a disability that can prevent them from earning an income. Always think one step ahead by having a disability cover that protects you even when you have sustained a temporary disability. 

 

Always remember to take action while you still can to protect you when you need it the most.

Need more information on MiWayLife? Read about our life insurance product, or get a life insurance quote in 30 seconds. Alternatively, call us on 0860 64 54 33 .
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Terms and conditions apply. Eligibility, cover and benefits are determined on individual risk profile. MiWayLife is an authorised FSP (No. 45741) and its product offering is underwritten by Sanlam Life Insurance Limited, a registered long-term insurer. MiWayLife is a division of Sanlam Life Insurance Limited - Reg No. 1998/021121/06