Why debt cover is important:
1. Interest rates are lower and favourable - get rid of bad debt
2. Distorted view we have on debt and death - Don’t we just wish our debt can die with us!
You really do not need to be an accountant to analyse your financial circumstances.
Sad to say, that when some people die they leave behind debt that the family has to deal with. NB: It is important to know what you owe and what you spend your money on monthly. You see, debt has an accumulative effect. You may buy something on what may appear as favourable terms (e.g.) No deposit and first installment of R500 after 3months. In that 3 months you may buy something else on terms, then add your car, insurance, home loan, petrol, electricity etc. you’ll be shocked at how much you earn vs. what you have to pay on a monthly basis. For some people at the end of the money there’s too much month left.
It is for this reason why it is so important to know your income status, your affordability status and your debt status so that you can then make arrangements on how you can cover your debt in the event of your death. Knowing your financial status is not only to cover you/your family should you die but also helps you plan better. You’d be surprised at the number of people who do not know what they spend their money on. They know it evaporates but don’t know why or even on what?
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