Volume 11, November 07

FINANCIAL ADVISOR NEWS

To find out more about FMI’s income protection products, please contact our Broker Distribution Team on: 0860 10 52 08 or email us at sales@fmi.co.za.

Financial Management International Ltd is an authorised Financial Services Provider, FSP 2717

Insure the Business Persons Greatest Risk

As a Financial Advisor, your self employed and professional clients need you, to enlighten them of the risks associated with loss of income due to disability.

 

According to Stats SA the average annual household expenditure for 2000 was R39400.  At present the State pays only R870 per month as a disability grant, which covers just 26% of the annual average household expenditure. A 74% shortfall remains usually forcing your clients to deplete their savings, if these exist at all! Running a business, your clients have the added burden of ensuring that their  business continues to stay afloat in their absence and that their employees still receive monthly salaries. Debt destroys businesses and in turn significantly impacts on our economy.

 

Research indicates that 5% of the total South African population has a form of disability that prevents them from full participation in life activities with only 19% of disabled persons employed.

 

The prevalence of disability increases consistently with age due to the exposure to accidents, debilitating illnesses and the degeneration of the body with age.

 

Increasingly important is the fact that younger people will incur greater financial losses without insurance to replace their income in the case of disability. This is due to this segment of the economy having a bigger income earning life span from which they need to produce. A disability temporary or permanent could have a devastating impact in the beginning of a person’s career.

 

It is therefore imperative that protecting your client’s income is as necessary as protecting their other assets and is considered vital when conducting a client’s financial needs analysis. FMI insures a vehicle of greater value and importance – the cashflow vehicle for the business man and woman.