Short Term Insurance – Why You Need to Protect Your Wealth
Short term insurance enables you to make provision for the unforeseen, thereby mitigating the risks that can cause financial loss. The insurer undertakes to cover the loss and damages related to an incident that involves your assets. Examples are vehicle, household, property, professional liability, disability, and health cover.
Although you might be so fortunate as to go through life without ever needing major surgery and you might never experience a burglary or be involved in a vehicle accident, these risks do exist. Some risks are more eminent than others, but each one has the potential of causing severe financial loss, which could zero all your wealth-building efforts in a matter of days. With short term insurance, you are covered from the potential risk and subsequent loss.
Which types of short term insurance are essential?
The cover you need depends on your particular risk profile. Your risk profile can be divided into three categories:
- Personal and family-related risks
- Health and medical
Personal and family risks include death, disability, and loss of income. Here you will need long-term cover for death and income loss. Life insurance, funeral cover, disability, and income protection cover are essential to cover the long-term risks.
Health and medical risks are covered through your medical aid membership, hospital plans or insurance that pays out for every day you are hospitalised to cover expenses and loss of income. It also includes GAP cover to pay for the shortfall between what your medical aid covers and actual medical expenses for a major medical procedure.
Assets fall under the short term insurance cover. This type of cover is crucial to protect against incidents like fire, accidents, theft, natural disasters, geyser bursts, infrastructure damage, and more. With the household, vehicle, personal belongings, and property short term insurance, you are protected against financial loss arising from damage to or loss of assets.
Why is it important to protect against loss of assets?
Any money that you have to pay to replace lost or damaged assets puts your wealth creation on hold. It can even lead to debt or bankruptcy. Considering the interest you lose on your income, investments, and savings when you have to tap into your financial assets to recover from an incident of loss or damage of assets, it is clear how a single incident can affect your financial security for years to come. Part of building wealth entails safeguarding it against risks. That is what short term insurance does for you.
Third-party, theft-only and comprehensive cover are available to protect against claims arising from a vehicle accident, theft, damage as the result of an accident, hail, fire, etc., and cover for damage to other vehicles involved in an accident where you’re partly or fully responsible.
Protection against loss of items like furniture and related items due to a disaster, theft or robbery.
Property or structure cover
This cover protects against financial loss as the result of damage or destruction of part or the entire insured structure. Get comprehensive cover to make sure the structure or damaged part can be replaced at the present cost or value.
You can also get cover to protect against the loss of personal items like cameras, jewellery, electronic equipment, and more when you take these items outside the insured property.
Assistance with short term insurance as part of wealth planning
Make use of the financial and risk management expertise of Efficient Wealth. Connect with us for an assessment and help to ensure you get the best and most affordable cover to suit your risk profile and wealth management plan.