When it comes to personal insurance, it’s not just about having a policy – it’s about having the right one. Yet, a significant number of individuals are falling short, leaving themselves vulnerable to financial risks and uncertainties.
"Despite the potential for unforeseen events, many individuals are sadly either not insured or underinsured," says Peter Olyott, CEO of financial services provider, Indwe Risk Services (Indwe). Whether for home, motor, health or life insurance, insufficient coverage can have devastating consequences during a claim. Underestimating the true value of assets and liabilities or the cost of healthcare treatment is a common pitfall, leaving individuals exposed to significant financial loss.
As an example, Life insurance often goes unnoticed, especially amongst the youth, regardless of its crucial importance. "Life insurance remains one of the most neglected forms of cover," says Olyott. Failing to secure life insurance can leave loved ones facing financial hardship in the event of an untimely death, leaving their families vulnerable to debt and uncertainty. Securing the cover when one is young, has definite financial benefits for the insured person.
Additionally, legal liability risks are also frequently underestimated. "While basic insurance policies may provide some protection, they often fall short in covering additional liability risks," advises Olyott. Liabilities may arise from many different angles, whether it be via social media platform, neighbours, pets, vehicles or employment.
Disability insurance is another commonly disregarded aspect of personal insurance. "Even with the risk of injury or illness preventing individuals from earning income, many fail to get disability cover. This oversight can have severe consequences, leaving individuals without a safety net if they are unable to work due to disability arising either from an accident or a serious illness," says Olyott.
Personal insurance is a crucial component of financial security, yet many individuals are falling short of ensuring comprehensive coverage. By taking proactive steps to assess, update and balance one’s insurance coverage, individuals can better protect themselves and their loved ones from unforeseen risks and uncertainties.
Regular policy reviews and updates are essential, yet frequently ignored. "Many individuals don’t review and update their insurance policies regularly," says Olyott. As circumstances change, such as the acquiring of new assets, disposing of old ones or experiencing major life events, such as the birth of a new child, it's crucial to ensure that insurance coverage remains relevant, adequate and up-to-date to avoid insufficient coverage when needed most.
PERSONAL FINANCE