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Coronavirus Q and A’s: advice to help steer the time ahead

26 Jun 2020

Credible and realiable advice is how we show we care

When life turns out to be financially challenging, one often requires great skills to navigate your way. More often than not, people benefit from professional financial advice. Living in the middle of a pandemic is difficult for most of us, with many facing retrenchment, reduced work hours or salary cuts. In fact, the Reserve Bank has predicted that the crisis could claim more than a million jobs and 1600 businesses.

There’s never been a more important time to have someone to lean on who can provide you with credible and reliable financial advice.

You are not alone

While we all steer our way through this pandemic, at Liberty it’s our number one priority to ensure you know you’re not on your own.

“In emotionally trying times, we tend to make emotional decisions – especially with things like our finances. Speaking with a financial adviser, who can guide you away from making rash decisions, is incredibly important during a crisis,” says Liberty's certified financial transitionist and economic expert, Mariette Tappan.

The current pandemic has certainly been a crisis for most – let us extend some advice your way to help you survive this trying time 

While everyone is different and has different financial goals, and the conversation you have with your financial adviser will be as unique as your individual situation, there are some questions that can act as a springboard to start you off. We asked Mariette Tappan to give her insights and wisdom to your most frequently asked questions. Here they are:

Am I still covered during the COVID-19 pandemic? How does it affect my life & disability cover as well as my income protection?

Knowing your options is key to surviving an economic downturn. Part of that is ensuring you’re aware of all of your investment portfolios and insurance policies. People forget they have options when they’re panicking. It’s important to make sure that you speak with your financial adviser, so you know exactly where your money and security are, even if you’re facing retrenchment or have lost your job.

The good news is that, if you are a Liberty client, the global pandemic has not affected the cover you have when it comes to your insurance. Liberty currently has no pandemic or epidemic exclusions in its risk policies, so as a policyholder of ours with life cover, any death benefits related to COVID-19 will be entirely payable. When it comes to income protection, if a policyholder is unable to work due to medically valid reasons, you will receive your pay-out.

Also, while COVID-19 isn’t currently listed in our benefit categories for critical illness cover, if the virus leads to certain secondary conditions, you will be able to access your benefits.

What are my options if I’m struggling financially or lost my job? Can I pause my cover? What about my retirement fund payments?

So many people are potentially facing retrenchment and reduced working hours and looking for ways to save money until they are back on their feet. Some are unemployed, while many people are returning to work as the South African lockdown restrictions are slowly eased, and still others in certain industries will only work again during Level 1.

It’s important to discuss your assets and finances with your adviser, who can guide you into a multi-phase plan to get you through your time of personal crisis. Your adviser can guide you through making your 3-, 6- or 12-month plan.

We understand that in such difficult times, people might be struggling to put bread on the table but cutting your insurance may not be the best option. Remember why you took out insurance or income protection in the first place - to protect yourself and your family. This is exactly the sort of time that is the reason you took out insurance in the first place – so don’t forfeit protection at the time when you most need it, particularly income protection insurance if you’ve lost some or all of your income.

People in this situation must re-examine their finances and prioritise what they need. There are other things that can be cancelled before you cut the insurance that protects you and your family. Consider cutting luxuries before more important items. For example, rather than selling the car you’d need to get to work, consider cutting or reducing your cable television and or internet subscription which can be easily restored once you luck turns around. Don’t drop everything all at once - it might not be necessary, because you might be employed again sooner than you think.

What about taking a premium holiday that I’ve read or heard about?

The COVID-19 pandemic has also seen many insurers offer premium relief options, which allow clients to suspend or reduce their monthly payments. Liberty, for example provides various relief options depending on the type of policy you have and these can be discussed with your adviser.

In the short term, it can be a helpful option, but it’s important to consider the long-term impact. You may need cover more than ever, and your retirement fund for instance could potentially lose significant growth after a premium “holiday”. Whether or not you should consider pausing cover or your retirement fund payments should be a decision taken only after you’ve received objective advice from a financial adviser.

What about my other investments? Will they recover?

Many financial advisers do believe that yes, while there has been short term volatility and loss, much like other economic crises, sticking to a long-term plan means that you won’t lose much in the long run. Perhaps it’s time to invest in lower-risk commodities, like cash? Maybe it’s just about weathering the storm and sticking to your current portfolio? These are all questions that your financial adviser can answer.

As we wait for life to return to some kind of normalcy, it’s important to keep an eye on your investments, as well as insurance cover and financial future. However, it’s best not to make rash decisions in a harsh economic climate, so be sure to bounce any investment ideas or decisions off of your financial adviser. When people are anxious, it affects their decision-making. It’s an adviser's job to keep their clients cool-headed, and help them make the best choice possible for their financial dreams.

What is the best thing for me to do now?

Getting in touch with your financial adviser can save you money, time and anxiety. Advice is always important- but even more so in times like these. In the midst of this storm, Liberty wants you to know that we are here for you and for your finances, wherever the road may lead.

For more details about benefits, definitions, guarantees, fees, tax, limitations, charges, premiums/contributions or other conditions and associated risks, please speak to a Liberty Financial Adviser or your Broker.

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. While every care has been taken in preparing this material, no member of Liberty gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information presented.  Please consult your financial adviser should you require advice of a financial nature and/or intermediary services. Liberty Group Limited is an Insurer and an Authorised Financial Services Provider (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).