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The circle of financial planning

06 May 2019

Insurance, such as cover for your household items and car, is important. However, long-term insurance, or risk cover, is just as important as it can give you a lifeline in the event of a life changing illness or diagnosis or loss of income due to retrenchment or disability.

When someone mentions insurance, some people often think of short-term insurance as being enough cover to sustain them post a difficult life event.

When considering your financial plan, the two types of insurance (long and short-term) should form part of this plan - which also includes investments and legacy planning.

How do I know what I need cover for?

A meeting with your Financial Adviser or Broker will help you understand the level of cover that you need for each life stage.

A qualified Financial Adviser or Broker is trained to help you navigate your financial plan for now and into the future.

What is right for me?

Young achievers

Age: 21-34 years

As a young achiever, in your 20s and 30s, income protection is important as your biggest asset is your ability to earn an income. According to Liberty's 2017 Claim Statistics, the largest amount of claims were paid to young achievers for retrenchment cover.

Yet, to confidently secure your financial future, protection against major life events is necessary. While youth convinces us that we are invincible, illness and disability does not discriminate. The second largest cause of claims for young achievers was critical illness. Disability cover is also important as young achievers are the most vulnerable to car crashes.

Young parents

Age: 35-44

For many, the next stage of life might involve starting a family. Consequently, you now have greater responsibilities and dependants who rely on you for financial security. Liberty's Claim Statistics reveal cancer and cardiovascular conditions are the cause of most claims, making critical illness protection essential if you do not have it yet.

With these greater financial obligations, life cover increases in importance to avoid placing financial strain on those left behind. It also safeguards dependant's futures. Providing for education is also one of the biggest concerns for young parents, making education protection worthy of consideration.

Established providers

Age: 45-54

The priority for this group is protecting their family's lifestyle and providing for their children's tertiary education. Comprehensive coverage is also important as risk of illness or disability is considerably higher. The majority of claims are as a result of illness. Protection of retirement savings is also important to avoid using these savings following an illness or disability.



This group needs to protect themselves against a compromised lifestyle, due to illness or disability, inadequate retirement savings or the use of these savings to account for declining health. The Claim Stats reveal the majority of claims were as a result of health issues.

Long-term insurance coverage must change as your life changes. There is a circle of financial planning that mimics your own circle of life. As your life progresses, there are additional insurance options that can help secure and manage your financial stability. Your long-term insurance needs to evolve with your changing lifestyle and life stages.   Ensure you check in with your adviser every two years to confirm you're still on the right level of cover for your circumstances.

This article does not constitute tax, legal, financial, regulatory, accounting, technical or other advice.  The material has been created for information purpose only and does not contain any personal recommendations. Please consult your financial adviser should you require advice of a financial nature and/or intermediary services.  Liberty Group Limited (Reg. no 1957/002788/06) is a registered Long Term Insurer and an Authorised Financial Services Provider (FAIS no 2409).

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Liberty Group Limited (Reg. no 1957/002788/06) is a licensed Insurer and an Authorised Financial Services Provider (no 2409).