Exit with dignity

Take care of your family when you are gone

There comes a time in a person’s life when thoughts turn towards final things. We ask ourselves, what will we leave behind us when we go? What will be our legacy?

Apart from the memories inspired by our actions through our lives, we can benefit our dependants by leaving them a tangible financial legacy, to help them when we can no longer help them ourselves. This means making some smart decisions now – while we are still alive!

The first step is to draw up a will. If you want to direct how your personal property, money and possessions are to be divided among your family when you die, you need to have a valid will. Otherwise, if you die intestate (without a will), your property is divided according to the laws of intestate succession – a process that can take years and often swallows up a lot of money.

Going beyond funeral cover, life insurance is a cost-effective way to provide your family with an income to keep the roof over their head and cover future expenses.

For a will to be valid, you have to be 16 years or older, and you need to be mentally competent. The will has to be in writing, and two people older than 14 have to sign as witnesses. You need to sign your initials on every page and sign the last page in full, in the presence of your witnesses, who must also initial and sign the will.

In your will, you can appoint an executor and divide up your property. The executor’s job is to make sure your property is divided up as set out in your will.

You can have a lawyer draw up a will for you, but a simple will from a stationery shop is just as valid.

Funeral cover

Funerals are an occasion for people to pay their last respects and support each other in a time of mourning. The last thing your dependents need is to worry about the cost of the funeral; by taking out the right funeral cover, or funeral insurance, you can help ease this burden in advance.

Many different types of funeral cover can be purchased. The three most common options for funeral cover are cash pay-out, cash-pay-out with funeral benefits, and funeral plan with living benefits. The most important thing to consider is what benefits you require. Shop around, and make sure the policy you choose covers your family’s needs.

Some funeral providers offer extra benefits such as transporting the body of the deceased to the place of burial. Other popular benefits include unemployment and maternity benefits, so that if you become pregnant or lose your job, you can stop paying premiums for a certain period until you go back to work.

When it comes to funeral providers, quality is better than quantity. Having more than one funeral policy with different providers is usually a waste of money. According to FNB Life, people with more than one funeral plan can end up over-paying by up to 30%. It’s also a headache to manage several policies at once, because beneficiary details have to be kept up to date, not to mention the need to remember all the different debit order dates.

Whatever you choose, though, make sure the funeral provider has a good reputation and is able to pay claims. Also, don’t delay – the closer you are to retirement, the more likely it is that your funeral cover provider will include a waiting period before any claim can be made.

Life and limb

Going beyond funeral cover, life insurance is a cost-effective way to provide your family with an income to keep the roof over their head and cover future expenses. It is also a good way of clearing your debts, so that your family isn’t held responsible for them. Imagine if they were evicted from their house because they couldn’t afford the instalments.

Fortunately, everyone is eligible for life insurance, and it doesn’t have to cost the earth. Insurers are offering pay-outs of R500 000 and more for monthly premiums starting from R149. What you need to do is work out how much money it will take to cover your family’s needs, based on your present earnings. The following guideline to replace your earning potential is suggested by hippo.co.za:

  • Take your gross annual income (total income before tax)
  • Work out how many income earning years you have left, between now and retirement
  • Multiply your gross annual income by the number of remaining income earning years to get the life cover you need to replace your income
  • Add any debts or liabilities you currently have.