1 simple solution to 3 big problems

Do I really need Life Insurance?

Think about it.

First off, it’s money which could be better spent paying off your debt or saving for retirement, and second,
You’re never going to enjoy the millions of life insurance on your life.

Take the single person for example. They’re usually just starting out in life with zero assets (yet) and zero obligations (yet). The conversation going on in their heads is something like this: “I’m single. I don’t have kids. I don’t own much and I owe nobody a cent And even if I did, so what?”

But believe it or not, there are also very sound reasons for owning life insurance, even for the single person. Today we’re going to look at three problems easily solved by life insurance.

Problem number one - debt

Let’s get the first group of people out the way – those who are debt free.

First off, congratulations, but you’re not as debt-free as you might think. Think ahead to the day when you leave behind an estate. When a person passes away, there are assets which need to be distributed to the heirs.

This costs money because someone needs to sort this out for you.
And since no-one works for free, it means an invoice from the person doing the sorting out.
Which means that none of us are ever truly debt-free

So let’s examine the debt-free estate for the moment

The first thing you’re going to need when winding up an estate is an Executor. Three of their major responsibilities are:

Paying all the debts in your estate,
Paying any taxes still owing to the state, and
Dividing up whatever’s left over between your heirs.

The Executor is entitled to charge a fee of 3, 5% of the value of the gross assets of your estate. Notice we didn’t say net assets (assets less liabilities), but gross assets (assets without liabilities).

So imagine leaving a R1 million home to your spouse.
That’s a R35, 000 debt owed to the Executor right there, and
To add insult to injury, VAT still has to be added, taking the expense to R39, 900

“But hang on a moment. My wife is Executor, so there’s no fee anyway!”

Well that’s fine if your estate is smaller than R250, 000. Once your estate exceeds this amount, an Executor needs to be appointed who is familiar with the whole process of administrating an estate. If she doesn’t fit the bill then she needs to engage the services of a qualified Executor.

Which brings us to those with debts to pay

Take for example, the average married couple.

Both are working full time jobs
Kids in school are costing them a small fortune.
A huge bond on the home with 15 years left to go
Two car repayments with balloon payments after 6 years
Medical aid contributions, and
Car and home insurance payments

Let’s be honest, most of us are struggling to make ends meet. So what happens when one of those incomes falls away? Let’s take a peek:

How do you cut the costs of schooling? A cheaper school is an option but who’s going to transport them? And what about aftercare now that your partners no longer there to fetch them? Wouldn’t it be nice if you didn’t have to pay the bond anymore?
The bond repayment? I might need to sell the house but the housing market is rock bottom right now. And renting isn’t that cheap either. I wish I could pay the bond paid off.
Two cars? No option but to sell one! Problem is, where do I come up with the money to settle the loan? We owe more on the cars than what they’re worth.
And then there’s medical aid. Our scheme won’t allow me to downgrade, so I’ll have to shop around. I can’t risk not having medical aid.
Car and home insurance? I’ll just have to take the risk. What else can we do?

It’s no secret that South Africans are financially stressed – and that’s with two incomes. Imagine the stress when one of those incomes falls away?

The simplest solution is life insurance.

Problem number two – Income

Did you notice some of the problems above – the schooling costs? The medical aid costs? Ask any small business owner what’s their biggest problem and they’ll tell you cash flow.

Let’s take another peek at the couple in problem one. Their agreement with each other was:

I take care of the bond and car repayments and half the groceries
You take care of the medical aid, insurance, school fees, half the groceries, and the maid

Now one of them passes away…

Where will the other person find the money for school fees? And it’s not a situation where you can take six months to sort it out – the school wants their money by tomorrow or else!
And imagine having no medical aid and winding up in an accident?
And what about car insurance? You still owe a fortune and the last thing you need is to have an accident or a car stolen.

There’s a couple of options open to you:

You could take a chance
You could find someone else who’s willing to contribute to those expenses, or
You could simply replace the income

Taking a chance

At Different Life we’re all about not taking chances. Cancelling car insurance is madness especially if you still owe a small fortune on them. The same applies to medical aid. Taking chances isn’t an option

Find another partner

This is possibly the worst advice ever – Getting a divorce isn’t cheap! What makes this sad is that it happens more often than we realise. Why would anyone be willing to place the person they love in this predicament?

Replace the income

Our existence as Different Life is based on our belief that life insurance is the only solution to this problem. Of course this all depends on whether life insurance is expensive or not.

Take a 50 year old Male non-smoker looking for R500, 000 life cover at Different Life. Does R328 a month sound expensive? Find out how much it would cost you by clicking here.

Problem number three – Inheritance

Who doesn’t want their children to have a better life than they have had?

Think about education for a moment. What do you say to your child when they tell you: “Dad, when I grow up I want to be a neuro-surgeon.” Do you respond with, “We’ll have to wait and see” because you haven’t the faintest idea of how that’s going to happen?

At Different Life we understand you only want the best for your children. It’s difficult enough educating them on two incomes, but what if one of those incomes falls away?

We believe that life insurance is the best solution to life’s unexpected twists and turns.

At Different Life we’re all about making your Life Different.