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BONDS, HOME LOANS,
MORTGAGES, PROPERTY FINANCE
SOUTH AFRICAN PROPERTY -
GOLF REAL ESTATE, GOLF SAFARI |
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PROPERTY FINANCE
PROPERTY
ADDITIONAL LINKS
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SOUTH AFRICAN PROPERTY FINANCE, MORTGAGES, HOME LOAN,
MORTGAGESA, GAME FARMS, GOLF ESTATES,
LIFESTYLE PROPERTY INVESTMENTS, SAFARI ACCOMMODATION, SAFARI CONFERENCE FACILITY
& SPA SAFARI OPTIONS
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SOUTH AFRICAN PROPERTY NEWS
Data Supplied from the Mortgagesa news centre
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South Africans cutting
out vital cover as higher rates bite |
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As
interest rates crept up again this week, many people are
feeling the financial pressure and creating extra funds
in their budgets by cutting out insurance cover – a
practice that could leave them in financial ruins.
Craig Deats, National Insurance Sales Manager at
MortgageSA, South Africa’s leading bond originator and
provider of insurance cover for all matters property,
says that generally South Africans tend to have a
‘negligent knee jerk reaction’ to higher rates and often
don’t consider the full impact of their choices.
“Looking at the history of behaviours on our insurance
portfolio, we can certainly say that there is an
increase in the number of people not paying their
insurance premiums in hard times.
“Human nature is such that general luxuries are not
first off the budget list, but rather certain insurance
policies because they are perceived as grudge purchases
to start with. People seem to be willing to take a risk.
But that could become a real problem should they need to
finance a loss out of their own pockets at a time when
they are feeling the pinch anyway.
“Should something go wrong when they have no cover, it’s
a double whammy of financial hardship that could be
ruinous.” Deats says that typically, household insurance
and life cover are the monthly expenses that people
skimp on when they are feeling a financial squeeze.
“People believe that they need DSTV, dinners out and
other tangible consumption and tend to feel things like
insurance cover are only for seemingly unlikely events
so tend to stop paying. “The risk seems to be small and
the reality is the chances of something happening are
actually small but the repercussions could be life
changing for yourself and your family should you need
cover and not have it.”
Deats says though it is a basic tenet of sound financial
planning to keep paying insurance premiums and cut costs
elsewhere. “People should draw up a budget and take a
long hard look at discretionary expenditure,
particularly on luxury items. That’s what needs to drop
off the budget first.
“It’s also a very opportune time to get new quotes
because you may have been paying too much for premiums.
It is often possible to negotiate lower premiums
especially if your circumstances or lifestyle has
changed.”
Deats notes that if people are correctly engaged by
their properly qualified financial planners, the
necessity of maintaining insurance despite the financial
pressure would have been understood and they would know
that policies can’t be cancelled. “Would you cancel your
car insurance or medical cover if you were cash flow
strapped?
“Not likely, because generally we understand the
importance of these covers as well as the risks of not
having them. However when it comes to life cover and
household insurance, the benefits seem so far off and
the risk remote so we take needless risk.” |
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