Assurance covers you for just in case, providing you with capital to cover the financial loss you may experience as a result of the life changing event.
It’s expensive if nothing happens, but is probably the best financial decision that you will make should something like a having a severe illness occur.
Assurance provides a capital or income when you do not have it. As you improve your financial wellbeing by creating your own capital wealth then your dependency on assurance should lessen.

Severe Illness

Heart attack, stroke, cancer, coronary arterial bypass systems are the four main and most common severe illnesses you are likely to contract.
The assurance covers you for a capital sum which is determined by the severity of event. If you have a mild heart attack your payout will be a smaller percentage of the capital sum assured than a major heart attack which will pay out 100% of the benefit.
Dreaded disease cover fits into your assurance portfolio between your medical aid which cover the costs in hospital and costs for recovery.

Medical aid covers medical costs
Severe illness covers the costs of:

Recuperation – it may take a while to get back to work and in the interim bills need to be paid. Your disability cover normally has a waiting period before paying out so the the payout from your servers illness will take up this gap.

Lifestyle adjustments – Some severe illnesses can leave you  incapacitated resulting in costs in modifications to your new lifestyle . If you end up in a wheel chair, for example, you will need modifications done to your home and perhaps your motor vehicle.

Get the right balance

Seek advice from advisor to find the appropriate cover for you. Understand the definitions and what you are actually covered for.

There is an overlap of cover between medical aid and severe illness cover. Assurance is there to replace financial loss and is expensive if you never claim. So your cover should be adequate. If you get it right your medical aid and severe illness should provide you with enough funds to carry you through a dreaded disease.

Q and A……

1) What is dreaded disease cover?
It is assurance which covers you for a severe illness related to major organs or systems such as heart attack, kidney failure, liver disfunction, cancer.

2) Why should you consider buying this type of cover?
A dreaded disease can have a serious impact on your financial security. The assurance provides a lump sum to cover costs associated with a severe illness. Such as,
Absence from work
Home care during extended periods of illness
Lifestyle modifications should the illness lead to not being able to work anymore
3) What do you need to know before buying this type of cover?
The severity levels and the definitions of the various dreaded diseases covered. Does the assurance cover multiple events? The older cover paid once off. The newer assurance covers for multiple events.
The assurance is normally an accelerated death benefit. Claims will therefore reduce your life cover and because of the illness you will probably not be able to get more cover.
4) What are the benefits of having this type of cover?
A successful financial plan makes provisions for all life changing events. Severe illness is one of them. The provision should provided adequate capital to allow for the costs associated a severe illness for the duration it takes to get well and back to a normal life.

5) How does age and gender fit into this type of cover?
Underwriting is based on risk factors and age and gender are some considerations. Certain dreaded diseases are experienced more with certain genders and at certain ages.
Cancer is more prevalent in the 50 plus age group than, say, the 30’s. Breast cancer is obviously a bigger threat and concern to women than men.

6) Core diseases covered by dreaded disease cover?
Core diseases are more prevalent.
Heart attack, cancer, stroke and CABS…coronary artery bypass surgery….
The benefits have been extended to scores more which have less of an occurrence.
Safer to apply for a comprehensive cover, however, will cost you more…

Speak to a financial planner who will advise on how much severe illness cover you should apply for and study the benefits carefully so that you understand what the cover will provide.

The new amendment to the Tax Administration Act is now in place giving SARS the power to put you in jail if you are negligent with your tax return.

The amendment removes the concept of “intent” which in criminal law needs to be proven that you wilfully broke the law.

Removing this from the Tax Administration Act places you fully responsible for the compliance of your tax affairs. Ignorance and negligence are no more an excuse leaving you open to heavy fines and up to 2 years in jail.

Let’s have a look at some of the common errors 

Late returns – Add to this a late income tax return because you were away on holiday or ill in hospital for that matter.?

Lost documents – misplaced supporting documents like a receipt or log book needed to prove a deduction leads to a lower tax payable.

A misinterpretation of expenses –  could lead to understated taxable income. You thought you could donate some money to a needy family member not realising it was a donation from which SARS wants tax. No room for appeals or corrections.

Your responsibility from now onwards

As harsh as this new legislation seems SARS says it is inline with world standards commonly applied in many countries. So the onus is on you to make sure that you are up to date and fully in charge of your tax affairs.

The COVID Pandemic has pushed many of us out of the office and in to the home as the new workplace.This new way of working creates expenses to do your work which SARS may entertain as a deduction against your salary.

These expenses are claimed under ‘Other Deductions’ on your tax return. During COVID Lockdown in 2020 a claim could be considered if you can prove to SARS that you spent more than 6 months of the tax year working from home.

What you need to qualify

Your employer must authorise you to work from home in writing as you will have to prove this to SARS.

You must have spent more than half of your total working hours in your home office.

You must have an area of your home, which is used solely for the purpose of work. It must be fully equipped with all equipment and furnishing needed to perform your job.

What expenses can be deducted?

You can claim a deduction against:
Rent
Interest on the bond
Repairs to the premises
Rates and Taxes
Cleaning
Internet costs
Insurance on the home
Security

How to calculate the home office deduction

The percentage of the office space against the total square meterage under roof of your residence is applied to the total expenses above.                                                            For example, if your home office is 20 square metres and your total home (including the office) is 200 000 square metres then 10% is applied to the total expenses.

As working from home has become the ‘new norm’ for many of us, you will do well to start keeping records for the current tax year preparing for the next tax return for 2022.