Importance of Proper Insurance Cover Stressed

November 5 - A recent article in Personal Finance outlined the absolute necessity of taking out proper insurance.

The article, "The 10 Worst Financial Mistakes You Can Make", lists the top three mistakes as not planning for the unexpected, not taking out short term insurance and not belonging to a medical scheme.

Quoting frightening statistics that the majority of South Africans die before they reach the age of 50, the first mistake is of vital importance to correct.

Life insurance, is therefore, an absolute necessity if one has dependents.

The vast majority of South Africans are underinsured against death and disability, something that has to be changed immediately.

The second mistake made is not having short term insurance.

None of us can predict the extent of damage in a road accident or loss of property, which is why it is so important to have the right cover.

Other statistics issued by the AA say that in South Africa, our chances of being involved in a car crash are 1 in 10, while around the globe, they are one in 5,000!

In addition, changing global weather patterns could mean that our properties are damaged in the most unexpected ways.

Finally, not belonging to a medical scheme is another mistake we make.

While we're young and fit, we don't believe that we'll need this type of cover.

However, joining a medical scheme at a younger age gives us a two-pronged advantage. Firstly, young people also get sick, and if you suddenly develop an illness that needs life-long treatment, you will have to carry that financial burden for many years if you are not covered.

Secondly, the older you are when you join a scheme, the higher penalties you pay.

As can be seen, insurance cover at many levels is imperative in South Africa today.