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Mortality benefits
What makes mortality benefits necessary?
You might want to have mortality benefits (also known as life cover) in place for a variety of reasons. Here are a few instances:
In order to pay off debt
A life insurance policy can potentially cover most or all of a client’s debt, e.g., on a home loan when you buy a property. The life insurance proceeds pay out on the death of the insured life and can be used to settle the debt with the bank.
Raha Financial Service
Raha Financial Service regarding Advice and Advice Processes
To provide guidance about the advice process that should be followed by a Raha Financial Service adviser (FA) when giving advice to a client.
It provides guidance on how to identify the client’s needs, find the most appropriate solution, and process to follow to implement the agreed solution.
RA vs TFI
Retirement Annuity Fund vs Tax Free Investment
As the following table will show, Retirement Annuity Funds (RAFs) and Tax Free Investments (TFIs) do not necessarily
fulfil the same financial planning and investment needs and they can easily co-exist in a financial portfolio. Both
investments characteristics should be reviewed and compared to the client’s financial needs to determine which is most
appropriate. There is no right or wrong answer and each client’s situation can result in a different outcome.
Product Information
Life Annuities:
The Life Annuity is a perfect solution for a healthy individual that requires a guaranteed income for life.
Houseview
Marital Status
Problem: The marital regime may impact on the freedom of testation of a client:
ANC with Accrual: The accrual claim is a concurrent claim in the estate. An accrual claim might derail bequests to
persons other than the Spouse. It is settled before inheritances are finalised.
Houseview
Assets
Problem: A client is not always clear on which assets are on the personal balance sheet. There is confusion between the
share value in a business and the assets and liabilities of that business. The same confusion exists for the assets and
liabilities of a Trust. Business and trust assets are often bequeathed in a Will, which is impossible to do. The inclusion of
Business or Trust assets on a personal balance sheet results in several inaccuracies on the FNA. Loan accounts are
either an asset or a liability in the estate.
Houseview
Employment benefits
Problem: The client may consider approved Group Life Cover (GLC) to form part of the liquidity in the estate to settle
liabilities. The Trustees of the Retirement Fund will identify all possible dependants of the deceased, which is timeconsuming
and only pay out once the process is finalised. This might leave dependants with a cash flow shortage to
provide for basic living needs whilst this process is being finalised. The Trustees of the Fund have an overriding
discretion to award benefits differently to a beneficiary nomination. Details about Employer Retirement Funds are not
readily available, and many misconceptions might exist in the client’s mind.
Buy-and-sell
Buy-and-sell agreement and summary
Business owners need to ensure that there will be continuation of the business upon the death or disability of a coowner.
They further need security in knowing that the disposal of their business interests will be dealt with in an orderly
manner.
Information Sheet
Advice Information Sheet
The purpose of this document is to guide you through the process of capturing the data that is necessary when you wish to provide Advice to your Client. We hope that this will make it easy for you to have all the relevant information required to have a meaningful discussion with your client.
