WEALTH WATCH
STEPHEN CRANSTON: Gap in cover not just scare tactic
It is well known that life insurance products have a higher penetration in SA than anywhere else in the world apart from South Korea, Taiwan and, depending on the study, Switzerland. The trouble is that very little of this is what you might expect it to be — actual cover in the event of death or disability. Most of it goes to savings policies, and quite a high proportion of retirement savings as well as all post-retirement annuities sit on a life licence. The Association for Savings and Investment SA (Asisa) puts out what it calls a gap study every three years. The study, carried out by True South Actuaries & Consultants, assumes that a household would want to maintain the pre-event standard of living. It further assumes that the need for capital extends only to retirement age. And it also excludes additional expenses resulting from the event, such as funeral costs in the event of death and medical costs or structural changes to home in the case of disability. Peter Dempsey, deputy ...
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