“This will only be a month, see you in April” we said to our friends and family as we all went into lockdown with elbow pumps and foot taps……I never thought that I would still be in lock-down in August while writing the Harbour monthly newsletter – I was planning to be on the beach somewhere. COVID has reset all our lives, dreams, goals, and aspirations as we all work from our homes or offices, social distanced from other people, in very different circumstances. Home-schooling, drinking “tea” in reusable plastic cups, zooming (not in a car) to family and friends, who live down the road, all over SA and all over the world. Roll on 2021.

It is also interesting how one takes stock of their lives when you are scared and unsure of the future. Due to COVID we are now looking at our finances more closely. Many businesses that were the darlings of the world have had to think about their business plans and future. Airbnb, who many people have quoted as one of the disrupters of the 21st Century, has had to make changes as countries go through second waves of infections and extend their lockdowns. Another example of an industry that has been disrupted and impacted by COVID is the insurance industry. Many people have started to ask questions about the insurance industry. Am I paying too much? Am I covered if I were too fall ill or even die? Why am I paying for this?

The insurance industry has been affected in a way it would not have dreamed in all its nightmares and business contingency plans. Some of the darlings of the Insurance Industry have failed its people by not paying for ‘valid’ claims during this COVID period when it was so desperately needed. They have now indicated that they would now pay, and only after many heavyweights have weighted into the discussion, is this too late? The reputational damage has probably been done. Will these insurance companies ever recover and will the businesses that required these payments ever open again?

It is interesting to note that Sanlam is over 100 years old and was created in SA because of the 1918 Spanish flu pandemic. People were dying and they were scared, and life insurance made sense. More than 100 years later and here we are again questioning and thinking about insurance. Many people have been asking if they are covered for COVID and if they are, how would they get paid? Would they get paid and would their families? “I probably need life cover” is on many people’s minds now.

When someone asks, “what cover do I need?” we cannot sprout insurance jargon explaining what life cover is etc.…. we should personalize the discussion and make the clients feel special. We need to start to listen to our clients and really listen. As we stay at home wondering will life ever be the same or is this our new normal. We must sit down with our clients, social distancing or via zoom or teams, and make sure that they feel that their personal concerns are been addressed.

Life insurance has become more complicated and people require skilled Financial Advisors to guide them through all the information that is available on life insurance. We cannot keep talking as if people are uneducated about life insurance however, we also cannot talk to them in a language that does not make sense, we need to be clearer and more transparent.

When buying life cover, people are asked what are your financial needs? Do you even know what that means? This is very important and it is the starting point for your financial journey. It is important to know what your needs are. Life Insurance is required to protect your wealth, whilst your money (investments) grow and this is called Wealth Protection. The growth of your investment is the sexy part of your money and is known as the Wealth Creation. These two factors are the main steps to understanding your financial needs and the start of your financial journey. Once you have established what your financial needs are, in consultation with your advisor, you can start to invest and purchase insurance products to make your money work for you.

Having life cover in place will ensure that should something happen to you; you will not have to take money out of your investments to pay for this unfortunate incidence. Thus, protecting your money, your legacy, and your families livelihood. Your money is protected (Wealth Protection) and your money keeps getting created (Wealth Creation) and continues to grow whilst you recover.

There are many insurance products in the market, and it can be very confusing if you are not ofay with the products on offer. Financial Advisors must undergo extensive product training to sell the products that the Life Insurance companies have. This ensures that clients are not sold something that does not make sense to their specific needs. This also ensures that you get good advice and you are not sold a policy that becomes obsolete. Your financial adviser should take into consideration your own personal needs and match your specific needs with the right life insurance product. This includes benefits like income protector, dread disease, capital disability etc.

At Harbour the Financial Advisor will initially discuss, with the client, what are their needs in terms of a life insurance product. The client’s needs will then be assessed against the insurance companies that provide comprehensive cover to ensure that they are protected against most medical conditions at an affordable price that is sustainable. Life Insurance products change and are enhanced often as actuaries are incentivized to come up with new products bi-annually. A financial advisor cannot keep up with all the new developments as they happen all year around. At Harbour we ensure that we are kept up-to-date, as we have in-house risk specialists who we consult with who take the time to learn the new benefits as well as attend new product launches so that our clients have the best chance of getting the new enhanced benefits. This means that when a situation arrives, like COVID, our clients are secure in the knowledge that they have the best cover and are safe.

It appears as if everyone is wanting a simple life, as if the world has become too complicated and we need to make things simpler so that a client gets cover that makes sense to them and can work for them. That life cover does not become another thing to worry about especially during these uncertain times. We need to strive for better outcomes and a simple life.

Contact Harbour to make your life cover journey more personal and simpler or if you have any life cover questions.

Harbour Wealth - Fiona Butler Financial Risk Specialist

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