Increase in claims show you need proper cover over holiday period

Old Mutual reports that accidental death claims over the holiday period increased by approximately 8% from 2009 to 2010. – and links this to the increase in road traffic volumes over this period.

The 2010 Road Traffic Report supports the notion that the risk of a road accident rises when traffic volumes increase. There was an increase from 611 554 vehicles in 2009 to 670 189 vehicles during 2010. The average increase was about 58 635 vehicles (9,6%). During the 2010 Easter weekend alone 70 fatal crashes were recorded with 105 fatalities.

“The unplanned nature of a car accident may leave you disabled and unable to earn an income. Avoid becoming a financial burden by ensuring that your cover is updated and that you are adequately insured,” says Ferdi Booysen, Risk Product Manager at Old Mutual.

If you are under-insured and the insurance amount does not cover your outstanding debt and living expenses, you may face financial hardship. It is advisable to take out life and disability cover while you are still healthy and insurable to keep your monthly instalments low and to qualify for a higher insured amount so that you are adequately covered.

It is also important to check that the premiums of your existing cover are up to date. If you do not get your premiums up to date you will risk having no cover during this holiday period.

While disability cover will provide an income when you are no longer able to earn a salary, life cover will take care of your loved ones when you are no longer there to provide for them.

Upon death your assets and bank accounts are frozen, but the advantage of life cover is that it pays out promptly while the estate is wound up. Without life cover your loved ones may be without any financial assistance until the estate is finalised, which can take up to a few months. Ensure that you nominate a beneficiary on your life policy. If there is no beneficiary nominated, the policy will pay into your estate and be inaccessible until the estate is finalised.

So while you’re making holiday arrangements, take some time to update your existing cover or take out the necessary insurance to enjoy financial peace of mind.

‘It is advisable to sit with your financial adviser or broker. He or she can assess your needs and provide you with the cover that best suits those needs. Your financial adviser will also be able to explain any exclusions that may be applicable to your insurance. Remember that life and disability cover should form part of a holistic financial plan,” concludes Booysen.