According to a new report commissioned by The Association of Savings and Investment (Asisa), South Africans in the working population, particularly between the ages of 30 and 50, did not have sufficient cover for life-changing events such as the death or disablement of the main bread winner.
It is estimated there is a R34.3 trillion shortfall in cover for these risks and that the average earner would need to spend an additional 4.5% of pre tax earnings to purchase adequate life cover.
Without adequate life cover the average family would be forced to generate additional monthly income of R5 630 to maintain their standard of living after the loss of an income earner. Alternatively the family would need to reduce household expenditure by 30%.
The disability of an income earner would force the average family to generate an additional monthly income of R7 443 to maintain their standard of living or reduce household expenditure by 33%.
These disturbing statistics only serve to emphasise the need for regular reviews of life and disability cover requirements. At Maximus we believe that such reviews should be done annually to ensure that families are adequately protected in the event of death and disablement.