Money Heroes
Money Heroes is an empowering series that gives you expert advice from our Momentum Dream Team to help you on your road to financial well-being. This season starts by discussing the importance of life insurance and its significance for you.
Unpacking short-term insurance
In our second episode, Brand Pretorius, CEO of Momentum Insure, highlights the important considerations you should make when taking out a short-term insurance policy.
While Funeka Ngewu, Executive Head of Claims at Momentum Insure, talks about the different types of insurance you might need.
We end with Theo Vorster, CEO of Galileo Capital, explaining what you’re paying for with your monthly insurance premiums.
Watch Brand Pretorius highlight the important considerations you should make when taking out a short-term insurance policy below:
Short-term insurance is a safeguard
Short-term insurance is not just a policy; it’s a safeguard against unforeseen things in your life. It should provide you with confidence and peace of mind that you’ll have cover and support when things go wrong.
“Finding the right insurance company to insure your assets involves several important considerations,” says Brand Pretorius, CEO of Momentum Insure.
It fits your personal needs
Your insurance policy must fit your personal needs. Make sure you assess your current life stage and understand the risks you might face regularly.
Know what you’re buying
“Consult a financial adviser who can help you understand your needs and the terms and conditions of your policy,” says Pretorius.
Understand exactly what you’re buying – if you don’t, ask questions before signing anything. If you need a financial adviser, visit Momentum’s website to find someone in your area.
Consider the cost
While looking for short-term insurance, you need to find a balance between what you need and what you can afford. Remember, cheap isn’t always the best option.
Do your research
Spend time researching the reputation of an insurer provider. Do they consistently deliver on their promises and provide excellent service? Using social media can be an effective way to gather information about other customers' experiences.
Watch Funeka Ngewu talk about the different types of insurance you might need below:
The types of short-term insurance to consider
Many of us view insurance as a grudge purchase – paying a monthly premium for something we hope we’ll never need. But think about what would happen if your car was written off in an accident or your house burnt down.
Motor vehicle insurance
“Make sure you insure your vehicle for the value you want to derive from the asset you’re insuring,” advises Funeka Ngewu, Executive Head of Claims at Momentum Insure.
Typically, insurers offer three options – you can insure for retail value (the amount a dealer would sell it for), market value (the amount you’re likely to get if you sell it privately) or a nominated value (if your car is not priced within the South African market).
Home and building insurance
Under building insurance, you must insure your home for its current replacement value.
“This value is not what you’ve bought the house for [but] rather what it would cost to rebuild it,” explains Ngewu.
For contents insurance, Ngewu likes to use a simple analogy:
“Contents is everything that falls out if you turn your house upside down,” she says.
This includes all of the moveable items in your house, such as your furniture, electronics, and clothes.
Business insurance
If you have a business, consider taking out an insurance policy that will cover you from loss or damage. While the type of cover you need depends on the nature of your business, think about what you’re most likely to lose if there is a fire or theft.
Ask yourself: will your business be covered for the right amount?
Watch Theo Vorster explain what you’re paying for with your monthly insurance premiums below:
Honesty is the best policy
The main purpose of short-term insurance is to shift the risk from you to your short-term insurance company. For a short-term insurer to take on that risk, you need to pay a monthly premium.
"Ultimately, it's a relationship between you and your insurer," explains Theo Vorster, CEO of Galileo Capital.
Transparency matters
You must be honest with your insurance company as they will pay out a claim based on the information you provide. Failing to disclose relevant information may lead to a claim being denied.
Vorster points out:
“That’s usually the key reason for a claim not to be paid – because the insurer did have sufficient information about what they were covering.”
Take car insurance as an example. If you take out a policy in your name for your son, daughter or family member to reduce monthly premiums, your insurer may refuse to pay out a claim if they find out you’re not the regular driver.
Insurance premiums are based on your risk profile, which is evaluated using the information you provide.
While insurance companies primarily generate income through the premiums you pay, it is important to remember that they are ultimately assuming your risk in the long run.
At the end of the day, short-term insurance is there to protect your assets.
Speak to a financial adviser and put #AdviceForSuccess into action.
Financial success is as unique as a fingerprint. That’s the beauty of defining your own aspirations and ambitions. Getting to where you dream of takes grit, determination and most importantly, honesty.
With two tough years of living through the pandemic and an increasing cost of living, it will take great introspection to be honest about where we find ourselves and seek help when we need it, especially from an expert.
The right advice can propel you forward. Our financial advisers have a vested interest in you: what do you value? What are your goals? This deep discovery sets the foundation for a relationship that will bear fruits of success.
Ready to begin your journey?
Financial success is as unique as a fingerprint. That’s the beauty of defining your own aspirations and ambitions. With two tough years of living through the pandemic and an increasing cost of living, it will take great introspection to be honest about where we find ourselves and seek help when we need it, especially from an expert.
The right advice can propel you forward.
Ready to begin your journey?
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