If the past 18 months have shown us anything, it's the importance of taking care of ourselves and our family. This also extends to our financial wellness when a crisis arises.
We need to protect ourselves from vulnerability physically, mentally and financially.
A topic I feel needs addressing as a start, is the concept of having Life Insurance against a mortgage.
A property is generally one of the most important assets one can acquire, and when a mortgage is taken out, it makes common sense to secure a Life policy against the capital debt owed to the financial institution lending the funds.
To elaborate further, if an individual (bond holder) passes away, the financial institution would require the bond to be settled by the beneficiaries.
With no or inadequate Life Insurance, this could cause stress and unnecessary chaos, as the outstanding funds would have to repaid. This would be done either through selling the property, or cashing out investments of the amount owing if the family is that fortunate. which would still be a financial burden long term.
As a property investor myself, I am always enthusiastic about Real Estate. However, my advice is clear; Real Estate is a great investment if your mortgage is covered through life insurance and/or disability cover. This extends to the concept of having life cover to pay for Estate Duty and Capital Gains tax should the property/s be sold.
Many people view life insurance as a grudge purchase, I look at it as an investment. The premiums are generally well priced, and should be considered part of your asset acquisition, as although it costs you money every month, ultimately it will pay dividends. None of us want to think of that day, but it is inevitable, and Covid has certainly reminded us of our mortality. I am excited to assist Engel And Völkers clients who wish to obtain financial advice regarding the above, and in fact all financial matters.
To your health and wealth.
Gavin Weiner (Discovery)
For more information or for answers to any burning questions, chat to Gavin using the link below or give him a call on 082 779 3357
https://www.discovery.co.za/financial-adviser/gavin-weiner
