Life policy will help pay bills of a lifetime

RECENTLY, while attending a funeral, I noticed a number of tombstones of teachers I'd known.

This made me reflect on how much I had disliked them at school and I thought about the new generation of teachers motivating the exceptional results so many matriculants are achieving.

The old schoolteacher was someone to be feared; someone who bullied us into doing our work. All this has changed.

The new generation of teacher comes across as a friend of pupils, encouraging them to do as well as they can, hence the incredible results which are being achieved.

At the same time, don't overlook the other professionals in your lives, such as accountants, lawyers and doctors, who will provide services during your lifetime. But let us not forget your financial adviser, who is really the only one left standing on death or retirement and will now need to play a pivotal role while all the other professionals role virtually cease

When I first entered the financial services industry my mentor advised me never to approach family and friends because they might feel obligated and not feel that they wanted to deal with me.

The reason being they were unsure I had the knowledge and expertise to assist them with their insurance and financial matters

But the crucial importance of life assurance became clear after I asked a 28-year-old good friend, married with two young children and about to embark on his first overseas trip, whether he was sure he had sufficient life cover.

His response was that he didn't and he quickly took out a policy to cover him in the event of accidental death. Sadly, while on his travels, he was killed in a motor vehicle accident.

Fortunately, the additional policy allowed his wife and children to make ends meet and pay for the bills of life over the next 25 years.

This was a salutary lesson for me and since then, I have asked many friends whether they have sufficient life cover. I do this because it would be hard for me to visit a grieving family who were now destitute.

Over the last few years, I've encountered a few terrible situations and sometimes wonder whether I failed some of my friends who have passed away.

But in each case, they already had a financial adviser and were satisfied with the service and advice they were receiving.

But in a number of these situations, it turned out there was insufficient cover in place to provide the widow and remaining family with an adequate annual income.

I now look after these widows and the little money they have, and it's extremely stressful when they ask for money for a little extra or for a special event.

My response is simple - as a financial adviser I tell them they don't have the money.

But when I put on my father and grandfathers' hat, my response would of course be different.

There is a joint responsibility between you and your financial adviser and friend, whom your family will look to for help in the event of your death.

It's not difficult to let your friend assess your financial situation. After all, other professionals who have looked after you during your lifetime will fade away and hopefully a financial plan in place will ensure that your family will appreciate what's been done for them to ensure that the income from the funds will see them through the rest of their lives.

• The writer is financial adviser of Bryan Hirsch Colley and Associates. Email bryanh@bhca.co.za