This is a real-life example but we have altered the personal information.
Life Cover has multiple purposes.
- To cover your debts and make sure the assets stay in the family
- Provide an income for the family and cover day-to-day expenses of the family members
- To fund education and other child-related expenses
- Cover death-related expenses such as a funeral, estate costs and other expenses
- Leave gifts to family or friends
Sipho is 37
a self-employed web developer
Earns R36 000 per month.
His wife Thumbi is 32
High school teacher
Earns R19 000 per month
They have 1 child who is 5 years old and they are expecting another. When Sipho first met us, he opted for the basic levels of cover. He opted to cover his bond and provide a small lump sum to cover his expenses. He knew he was underinsured, and at the time it was a risk he was willing to take.
Now with a second child coming, they want Thumbi to resign and be at home to focus more on their kids. Sipho is going to be the sole provider for his family. Should something happen to him the family will have no income.
Insurance is now essential for Sipho.
He has a bond of R800 000 and he would like to make sure his family receives an income of R21 000per month until his youngest is 21 years old. How much life cover does Sipho need?
Taking into account all of his other savings and assets we determined that he needed a little less than R5 million life cover. Sipho went one step further than his current cover and also included income protection which means that should be injured, he will still receive a monthly income. Even if he cannot work, he can still provide for his family.
Determining how much cover you need requires planning and an understanding of your financial goals. You can play around with calculators but you should always speak to an independent planner as you are unique and your life will have circumstances a spreadsheet or calculator is not able to consider.
How much cover do you need?
As a financial planner, our goal is to listen to you, understand your goals and provide the best objective advice. The correct plan will provide peace of mind. Here at Growmatter, we want the best for our clients and we are committed to working together.
