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What is Risk Cover?

17 Apr 2019

By Henk Meintjes: Head of Risk Product Solutions, 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.


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 made disabled, through an accident or illness, and are unable to earn as much money as you did previously, 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.


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.


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).

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