People are chosing cash over safety
The economic climate is pressuring people into making a tough choice about their insurance cover.
It is common knowledge among economic experts that the first thing that
consumers cut back on when they face financial problems are 'unseen' commodities
- those expenses that they pay each month but don't see any physical returns on,
such as insurance policies.
Naturally, the cutting back on insurance is considered a foolish gesture,
leaving the consumer unprotected and even more vulnerable in volatile economic
times. However, some people find that they have no choice when they need to
decide between food on the table or another premium payment.
At present, statistics show that South Africans, on average, spend 34% of
their disposable income just paying off debts and that number will continue to
Consumer Assist, a South African debt counseling organization, noted this
week that it was seeing more and more citizens cashing in their insurance
policies, and is calling for the general public to consider very carefully their
steps before making such a rash decision.
"We are seeing more and more heavily indebted people taking the risk of no
insurance, or cashing in policies early," said the Chief Executive Officer of
Consumer Assist, Andre Snyman.
Naturally, Snyman said that counselors with the organization try to urge
consumers to try and work around the problem instead of taking "hasty, short
term measures". "Insurance should be seen as a form of protection," he said.
It has been suggested by insurance experts that instead of cutting out
insurance policies altogether, consumers should speak to their agents about
cutting back on those less important coverage or shop around for a cheaper deal.