What is risk cover?

2019-04-15 13:40
The risk of not covering yourself for long-term risk.

The risk of not covering yourself for long-term risk. (Photo supplied by Liberty)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

By Henk Meintjes, Head of Risk Product Solutions at Liberty.

You may have heard the term risk cover thrown around in conversation. But what is it really? At Liberty, risk cover is long-term insurance that provides financial protection in the wake of major life events such as critical illness, disability, retrenchment or death.

The true value of risk cover is often only experienced when one is confronted with the reality of an event which requires an insurance claim. At this stage, individuals are either insured and receive the necessary financial support in their times of need, or they are not, and are faced with mounting bills and stress during already difficult times.

HOW IT WORKS

Through the payment of a monthly premium, you can insure your own life and those that are financially dependent on you. As a business, you can even insure a specific individual or business partner. In turn, the insurer will pay an agreed amount, referred to as the 'sum assured,' should a claim event occur. The premium is based on individual risk profiles which are determined by the insurer prior to the uptake of the policy.

There are four main personal risks that long-term insurance addresses:

1. Critical illness: If you are diagnosed with a critical illness, such as a heart attack, cancer, stroke, Alzheimer's and Parkinson's, you will receive cover against medical and other necessary lifestyle adjustment expenses involved.

2. Disability: If you are disabled, through an accident or illness, and are unable to earn an income, you will receive financial cover to compensate for the loss in earning ability.

3. Retrenchment: If you are retrenched from your job, this cover will protect your income for a certain number of months immediately after, giving you a buffer to find new work. 

4. Death: If you pass away, your family will receive financial security.

WHY DO YOU NEED RISK COVER?

The obvious reason for risk cover is to provide for your loved ones and other dependants if you pass away. Many, however, overlook the fact that your ability to earn an income is your largest asset and your expenses will not disappear if you are unable to work. Disability and critical illness cover should therefore be in place as soon as possible and before there are any dependants to protect.

HOW TO CHOOSE RISK COVER

Everyone lives unique and different lives and there is no ‘one-size-fits-all’ option with risk cover. A single working professional requires very different risk cover to a new parent. This is where consultation with a financial adviser or a broker, becomes essential to ensure you have the cover you need and that it is suitable for your personal circumstances.  

Ultimately, risk cover helps secure you and your family’s lifestyle. It does this by removing the financial burden if you face an unexpected life-changing event. If you talk to a Liberty financial adviser or broker, they will be able to advise you about Liberty's comprehensive risk cover.

Liberty Group Ltd is an Authorised Financial Services Provider in terms of the FAIS Act (no2409).

This post and content is sponsored, written and provided by Liberty.

Read more on:    liberty  |  south africa  |  risk cover
NEXT ON NEWS24X

Inside News24

 
Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.