Single mothers even more at risk when losing their income

KAREN BONGERS Product Development Actuary at Sanlam Individual Life

Most parents will agree that raising a child is expensive. Raising a child on one income is particularly tough but a reality for many South Africans. According to research conducted by the Human Sciences Research Council (HSRC) and the South African Race Relations Institute (SARRI), more than 40% of South African mothers are single parents.

Karen Bongers, Product Development Actuary at Sanlam Individual Life, notes that with so many women being solely responsible for their children, the importance of making careful provision should something unforeseen happen to them cannot be overstated. Even shortterm income loss is challenging if there are no savings to dip into – a reality faced by many. When a single mother loses her ability to earn – either short term or a long-term permanent loss – the financial consequences are often devastating.

As an adviser, it is your role to empower clients who are single mothers by giving them the peace of mind that their income will be replaced should they no longer be able to work due to an accident or health problem, or should they pass away. Consider discussing these points with your client:

• Sole provider: As the sole breadwinners in their households, income protection becomes very important. A pay-out from an insurance product can be a lifesaver, enabling her to continue caring financially for herself and her family.

• Know the detail: It is important for her to understand exactly what she is covered for under each type of policy, and for what amount. Based on your clients’ specific circumstance and concerns, discuss the various types of cover available and what would work best for her.

• Income protection and disability cover would allow her to get a pay-out should an illness or injury result in her no longer being able to work. A lump sum pay-out from disability cover could help her repay debt, should she become permanently disabled, whereas income protection cover can replace her monthly income if she cannot work due to illness or injury, either temporarily or permanently.

• Life cover can be used to pay off debt or it can assist with her dependents’ long-term expenses if she were to pass away. For the latter she may prefer a death income benefit over a lump sum to give her dependents a steady monthly income for a specified period without the risk of the money running out too soon.

• Should her child become seriously ill, her income may be affected in an indirect way. She may want to consider cover which would pay out a lump sum or income should this happen.

“The right insurance can enable your client to protect their livelihoods and meet the needs of those who depend on them financially when they are not able to do so themselves,” concludes Bongers.