Why risk planning should start with Income First
If their monthly income has the potential to provide for all their financial needs, why doesn’t risk planning start here?
Continue ReadingThe tide is changing. The industry is evolving. And, as the industry starts to recognise the rising trend to put Income First, so will this better way of doing life insurance become the “new normal”.
“Risk insurance cover with income benefits at the forefront is the most logical way to give advice,” says FMI CEO, Brad Toerien. “Clients typically get paid in monthly incomes, and therefore protecting them with monthly income payments is the most natural and risk-free fit. Protecting 100% of your clients’ income will also ensure that they’re not just protected in the case of a permanent disability, critical illness or death, but for more likely, temporary risk events – such as emergency operations or a bad case of flu – that can still have a massive impact on financial security.”
Throughout their working career, a temporary injury or illness is your client’s most likely risk1 - and it’s one that can disrupt their entire financial future. Many South Africans fail to appreciate the value of their monthly income, and the extent to which they depend on it: it pays for all they have today as well as the life they’re yet to live; those future goals and ambitions.
It’s time to change the way life insurance is perceived and sold, shifting away from “death cover” and lump-sum-only solutions - to income benefits and living insurance… paving the way for a superior industry standard. An Income First standard.
Toerien unpacks the many benefits of taking an Income First approach:
DO choose to prioritise income benefits by protecting 100% of your clients’ income across all risk events before choosing to insure anything else. DON’T let poor choices eat away at your value over time.
“Life is about the impact we make on the people around us. As an adviser, you make an impact by protecting your clients’ income. This ensures that they are free to continue uplifting the lives of those they love and care for, no matter what life may throw at them. With cover that puts income replacement benefits first,” concludes Toerien.
1Temporary Disability, unable to work for 14 days or more during working career. FMI Risk Stats 2019
2The South African Savings Institute Dec 2017 SARB Quarterly Bulletin
If their monthly income has the potential to provide for all their financial needs, why doesn’t risk planning start here?
Continue ReadingRecommending a lump sum to produce an income is like your clients wanting a red car but suggesting a green one on the premise that they can always have it painted red afterwards.
Continue ReadingWe understand, that in practice, there are some hard questions the Income First approach poses for older clients who already have lump sum cover in place. Here's how to address these issues.
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