Sanlam Shows South Africans are Underinsured

Sanlam Insurance warns that many people are underinsured Their advice is that savings should not get priority over risk cover.

Sanlam Insurance has painted a dreary picture of South Africans regarding their retirement plans, and warns that the majority of people in the country remain woefully uninsured.

While many believe that saving for their future and their retirement should take priority of everything - including risk cover - the sad fact of the matter is that most young people today will not even reach retirement age.

Statistics show that a staggering 60% of today's 20 year olds in South Africa are not destined for retirement.

That means that if these 60% are not adequately insured, their dependents will be left seriously out of pocket.

Sanlam has shown that the situation is so desperate that South Africans are around R10 trillion underinsured.

According to the Chief Actuary at Sanlam, Viresh Maharaj, the situation in South Africa can be compared to "playing Russian roulette with the financial well being of your dependents".

South Africans make the error of underestimating the death benefits that will be needed by their dependents.

As such, savings are given a disproportionate advantage over risk cover.

Families should aim to provide at least 75% cover for their dependents should a breadwinner pass away, but statistics show that a family of 2.4 dependents only manages to scrape together 5 - 15%.

Blacks fair even worse as an average family comprises over 3.5 dependents.