Personal Finance: Two lessons learned on one day.


A few months ago, a client whom we had not seen before made an appointment to meet at our office to discuss his financial planning needs. He mentioned that he had some investments as well as a life assurance policy he wanted to cancel as he felt he was wasting his money by paying the monthly premiums. We asked him to tell us a bit more about himself and his plans for the future. It turned out that he had a rather serious medical condition which was impacting on his ability to work and earn a living. Once we were able to gain access to his life assurance policy information, we discovered that the policy had a disability benefit attached to it. He told us he had tried to contact the life assurance company directly to ascertain whether or not he was covered, but after numerous unsuccessful attempts, he gave up.

We were able to ascertain that he was indeed covered for this particular condition and after completing the necessary paperwork we were able to give him the good news that his claim would be paid. Once the claim had been processed, we received a call confirming that a sizeable amount had been deposited into his bank account.

A correctly structured life policy, with appropriate benefits, will pay out if disaster strikes and could make the difference between a future fraught with financial difficulties or one where you are able to adequately cope with what the future has in store for you.

Shortly after hearing this client’s amazing news we received a frantic phone call from another client who was beside herself with worry. A huge amount of money had been stolen out of her bank account. She asked if we could help as she did not know where else to turn. When we enquired as to what had happened she admitted that she had been duped into replying to an SMS requesting her to supply her bank sign-on details and password. She realised that she had made a huge mistake and her bank was refusing to reimburse her. Criminals are developing more and more sophisticated ways of extracting money from bank accounts these days. Despite our client being a highly educated, very careful individual, even she had been persuaded to pass on confidential information to criminals.

Two lessons learned on that day were firstly that a life assurance policy should be viewed as an asset to be cherished, not as a burden to be cancelled the moment you experience financial difficulties and secondly that no bank, SARS or any other financial institution would ever ask you to provide them with your sign-on and passwords via SMS, email or any other electronic means.

Imagine how much our client would have lost if he had cancelled his policy when he called the company’s Call Centre. Please, remember to never provide anyone else with your passwords or other access information!

Rands and Sense is a monthly column, written by Ross Marriner, a CERTIFIED FINANCIAL PLANNER® with PSG Wealth. His Financial Planning Office number is 046 622 2891

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