Prepare your clients so reality does not bite

A recent survey by Sanlam Individual Life showed that major milestones often lead to financial reassessments.

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Reality Check

A recent survey of 900 respondents by Sanlam Individual Life showed that major milestones often lead to financial reassessments. For 33% of respondents, becoming a parent was the reality check they needed to get their finances in order. Other reasons included losing a job or a death in the family. Chances are, the same reality check moments apply to most, if not all, of your clients.

Petrie Marx, Product Actuary at Sanlam Individual Life says, “The start of a new year is the perfect time to check in with your clients and ensure their needs are holistically addressed”.

When the reality check moment hits

It often takes a “reality check” moment to convince someone to re-evaluate the reasons they might not have the cover they need. 

Marx says, “These moments are often exciting milestones, like becoming a parent (33%), buying a home (23%), or getting married (15%). Sadly, they also include reality checks such as divorce (8%), losing a job (29%), a death in the family (24%), or a familial illness (14%). These wake-up calls often occur when we least expect them. That’s why it’s imperative to help your clients plan for the worst while hoping for the best.” 

Petrie Marx_
Petrie Marx, Product Development Actuary, Sanlam Individual Life

Financial reality checks come in all forms, including: 

  1. Starting their career

    The first job is one of the biggest milestones and one that should encourage people to think about their cover. Marx says, “When someone starts their first job, they have roughly 40 earning years – or 480 pay-cheques – ahead of them. The risk of potentially losing their ability to earn an income would come with a devastating impact. For clients in this position, income protection or disability cover is of utmost importance. Additional death cover can also be put in place to avoid burdening their family with student debt.” 
    Sanlam Individual Life’s 2021 claim statistics show that 57% of income protection claims are paid to those younger than 45 years. “We need to empower more young people to access affordable income protection options to enjoy greater financial confidence.”

  2. Getting into a serious relationship

    Starting a serious relationship can have far-reaching implications for your client’s finances. This could include combining their finances, buying a home together, getting married, and having children.  

    Marx says, “For clients experiencing this reality, it’s imperative to discuss covering their debt with credit life insurance and additional death cover, with long-term debts like a mortgage and short-term debts like credit cards and personal loans all being considered.” For many, becoming a parent is the biggest reality check moment. Having death cover and sufficient income protection as well as disability cover ensures peace of mind.

  3. Illness and disability

    Illness can strike at any point in life. Without the necessary protection, dealing with an illness can become even more challenging due to added financial pressures.  

    According to Sanlam Individual Life’s 2021 claims statistics, 71% of sickness and 57% of disability claims are paid to clients younger than 45 years. 56% of severe illness claims were paid to clients younger than 55 years old, with cancer as is the biggest contributor. These statistics show the importance of having sufficient cover in place throughout your life and not just when you are older.

Marx concludes, “South Africans are facing immense financial pressures and it can be daunting to juggle day-to-day needs, let alone plan for life’s curveballs. Help your clients to plan for their futures by assessing the risks they face and helping them to manage these in the most cost-effective way possible.” 


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