As a result of the financial challenges facing consumers, Johan Minnie, Liberty group sales director, is concerned that the financial pressure facing households might lead to them cancelling their insurance policies. According to Minnie, between 8% and 10% of life policies lapse each year, and 90% of these cancellations are due to affordability.
“When consumers face serious financial pressure, they tend to prioritise debt repayments, school fees and other expenses – all of which are important, over life assurance premiums. Unfortunately, you don’t know when you’ll need this cover; that’s why cancelling it is a serious risk,” says Minnie.
Now is the time to reach out to your financial adviser, who has a crucial role to play in helping you manage the investments, cash flow and risk-cover challenges in your household, he says.
When the economy is sluggish, consumers need to ensure that they have the right insurance cover in place to get through the slump. This is where financial advisers must use their expertise and knowledge to put the right measures in place to help you maintain your long-term financial goals.