Secure Your Financial Future With Income Protection

What is your GREATEST asset?

Most people think it’s their house, vehicle or bank balance.

They are wrong.

For the vast majority of people the greatest asset they have is their ability to generate an income.

How does the bond for your house get paid?
How do you repay your debt?
How do you fund your Retirement & Investments?
How do you provide for needs such as food, shelter, clothing & other life essentials?
Unless you are independently wealthy, you work to create this income.

What is Income Protection?

IP is an insurance policy which provides you with a regular income if you can’t work because of illness or disability.

You may ask why you need to have an income protection policy if you already have disability cover. Disability Cover is a necessity for lifestyle adjustments, but only pays out a lump sum of money, whereas an income insurance policy will pay out a fixed monthly amount to ensure that you can take care of your & your family’s monthly expenses when you are no longer able to work or cannot work for a specific period.

Income protection insurance is a type of cover that not many of us think about. While we are readily sold disability cover, not many of us buy into the idea of having our income insured.

When looking for the right income protection insurance for you, it is important to consider all your options. You may require an insurance policy that offers both temporary and permanent protection.

Temporary income protection will usually cover you financially for short amounts of time off work due to illness or injury. All contract workers and those who are self-employed are encouraged to take out this particular insurance.

Permanent cover will basically pay out for time off work should you find that your injury or illness results in you being permanently unable to work. While disability insurance will pay you out one lump sum, income protection insurance will pay out several and ensure that you are able to afford your monthly overheads, as before.

Making sure that your income is protected with income protection insurance is in the best interest of both yourself and your dependents. By ensuring that you will still be able to earn an income regardless of what happens, is the best thing that you can do for you and your family.

“If you had a machine that churned out money every month, wouldn’t you without a doubt insure it???”

Investment Planning

Great News – Exchange Control Changes

SA residents may now use their R1 million single discretionary allowance (the travel/study/maintenance etc. allowance) for investment purposes without having to obtain a SARS tax clearance certificate.
In effect this means that individuals, over 18, may now invest a total of R5 million offshore (however the R4 million foreign investment allowance still requires a SARS tax clearance certificate as per normal).
i.e. the new limits are as follows:
R1 million per calendar year per adult – No SARS Tax Clearance Certificate Required
R4 million per calendar year per adult – SARS Tax Clearance Certificate Required

Please note: if the full travel allowance is used for investment offshore, no more funds may be used for the travel, study, maintenance etc. allowance for the rest of that calendar year.

This is great news as a potential investor may now, subject to no other travel/study/maintenance allowance requirements, invest an additional R1 million, with ease, offshore.

Contact Southwood Financial Planning to review your investment portfolio. We together with most asset managers believe return prospects on selected foreign investments to be more attractive than the return prospects of South African shares in general. On top of this, we believe there is a high probability that the rand will be weaker in future, which should benefit South African investors in rand terms.

However, the “correct” amount to invest offshore differs for every individual investor so we will assist you in confirming the appropriate amount, asset allocation, fund choice and vehicle to utilize in investing offshore.