As I read about the pension fund industry and how it owes South Africans over R50 billion, https://www.biznews.com/sa-investing/2019/11/08/pension-fund-secret-unclaimed-money I thought I should write to inform all of us how we could avoid a problem like this when we pass on. As a financial advisor, I come across many people who have life covers, funeral policies, endowment policies, retirement annuities, preserved pension funds, etc… and you will be surprised how many people forget about some of the policies that they have. Our advice process requires that they inform us of what they have. 9 /10 times, we always find a policy or investment that someone had forgotten about. As Covid-19 is beginning to affect some of us, we are also receiving requests for help from family members who want us to assist them and find out if their family members had any policies.
How do we minimise the risk of having policies and investments that our family members might not know about? If our families do not know what policies and investments we have then when we die, they will not claim. So I suggest you do the following;
1. List all the policies and investments that you have
2. Check your bank statement for deductions and trace where the money is going. As an example, there are many medical doctors and other professionals who took policies while they were medical students and they don’t remember about them and because the amounts they pay are so small, they don’t bother to find out what they are paying for
3. Request your financial advisor to draw an Astute report for you – this is a report of your policies and investments. Note that unfortunately, this report does not always have all the policies and investments that you have listed on it. We can also assist you to draw this report for you, if you give us authority to do so
4. Put your Astute report and any additions to it in your file somewhere at home so that your family will know where to claim when you pass on
5. For our customers, we create a Folder for you which contains all your policies and investments so that even if I die before you, someone at ThuthukaSA will be able to give this report to your family members to go and claim
6. Note that your pension, provident fund and retirement annuities fall outside of your estate. You must therefore make sure that you name beneficiaries for all these because if you don’t, there will be a lot of delays in paying out
7. If you still have young children, do NOT name them or their guardians as beneficiaries to your life cover. We will address this in a separate newsletter.
If you want us to help you compile a list of your policies and investments, email firstname.lastname@example.org