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life cover

Inheritance Tax Featured Image
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Inheritance Tax & Estate Duty Guide

Many people have a mental block when it comes to the topic of tax. Who can blame them? Trying to make sense of tax laws in South Africa can be an incredibly difficult undertaking. However, this is not an excuse to leave your assets to fate.

When creating your estate plan, you need to have a basic understanding of inheritance tax and estate duty. In that way, there won’t be any surprises for your loved ones later.

In this guide, we’ll take you through inheritance tax in South Africa and Estate Duty.

Inheritance Tax In South Africa

When a natural person passes away, that person’s assets are collectively placed into an estate. This deceased estate has to pay certain inheritance taxes as well as personal income tax for the deceased’s final tax year.

The estate assets can include property, movable property (like cars and keepsakes), money, or even business shares.

Several different laws apply to inheritance tax in South Africa:

  1. The Estate Duty Act (Act 45 of 1955): This law places an estate duty on the deceased estate.
  2. The Administration of Estates Act (Act 66 of 1965): This Act handles the disposal of deceased estates in the country.
  3. The Wills Act (Act 7 of 1953): This law influences all testators (those who have written a will or given a legacy) with property in SA.
  4. The Intestate Succession Act (Act 81 of 1987): This Act covers all deceased people who own property in SA and have not left a valid will.
Five red houses in a row

Inheritance tax is divided into the following types of tax:

  • Personal income tax for the deceased
  • Estate duty tax
  • Capital gains tax
  • Donations tax (if relevant to the deceased estate)

We’ll take a look at estate duty tax below.

What Is Estate Duty Tax?

Documents for Estate Duty

The estate beneficiary/beneficiaries do not have to pay tax on what they inherit. The inheritance is not seen as part of their gross income.

Estate duty is deducted from the estate before it reaches the beneficiaries. Usually, it is the estate executor’s responsibility to pay this tax.

As mentioned, estate duty is regulated according to the Estate Duty Act. This tax applies to the transfer of assets and wealth from the deceased estate to the beneficiaries. It applies to the dutiable amount of the estate.

The tax amount differs depending on the value of the estate.

  • For an estate under R30 million, the estate duty is 20% of the estate’s dutiable amount.
  • For an estate over R30 million, the estate duty is 25% of the estate’s dutiable amount.

There are some exceptions and limits applicable to this type of tax. For instance, in some circumstances, double taxation may occur. This happens when the deceased’s assets are subject to estate duty within South Africa and a foreign country.

Fortunately, South Africa has estate duty agreements with several countries to avoid double taxation. You can find out more about these tax agreements here.

Estate Duty, Debt, & Life Cover

Large extended family in front of front porch

The winding-up of a deceased estate can take anywhere between five months and several years, even if there is a valid will in place.

This can lead to a trying time for loved ones and family members in a financial and emotional sense. Even more so when estate duty and debt are added to the mix.

When it comes to estate duty and debt, life cover is a useful tool that can help to reduce debt and assist loved ones. The payout from a life insurance policy goes directly to the beneficiaries. It does not form part of the estate, meaning no estate duty tax is applied.

This means your life insurance beneficiaries will receive immediate relief upon your death, instead of having to wait for the estate wealth transfer to be finalised. This gives plenty of value to your loved ones.

In the case of any debt you may have outstanding, life cover is also beneficial. If you nominate a family member as your beneficiary for the policy, the payout is protected from creditors, ensuring your family’s financial security.

Contact us to discuss life insurance and how it can improve your estate planning.

Final Thoughts On Inheritance Tax & Estate Duty

Life belt on ship

Inheritance tax and estate duty may seem complicated at a glance. Yet, with the right information and help, you can easily navigate through it.

Having life cover policies in place will be instrumental for your estate planning. This type of cover will alleviate the financial stress that the eventual estate transfer process will have on your beneficiaries.

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Feel free to contact us with your queries about inheritance tax and estate duties.

+27 11 839 2302

info@maysure.za.com

Read more about life cover and financial health from Maysure Financial Services.

Gap Cover Benefits Featured Image
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Gap Cover Benefits: The Shocking Truth About Medical Aid Fees

South Africans are spending more each year on private health cover. Medical insurance has never been more prioritised than now. Yet, it might surprise you to learn that many people still do not have enough money to cover their medical expenses.

Even with the most comprehensive medical cover, you could still pay up to 400% above this tariff. This comes at a hefty cost to unsuspecting consumers. The shocking truth is that even with medical aid quite a few health expenses still need to be paid out of pocket.

As a result, medical gap cover has become a necessity. Carry on reading to find out the benefits of gap cover.

Why Do We Need Medical Gap Cover?

Essential worker wearing PPE

Gap Cover is a short-term insurance product that helps you with financial shortfalls, or “gaps”. These “gaps” can occur when doctors, specialists, and professionals charge more than your medical aid’s rates.

Gap cover helps to cushion the blow. It.carries a person’s medical costs, where that person can’t do it themselves.

While it doesn’t take the place of medical cover, it can cover a significant amount of the shortfall. Gap cover ensures you are not hindered with unexpected medical expenses when you are at your most vulnerable.

Gap Cover for Medical Aid: Benefits

Nurse and patient

Your medical aid may offer coverage of up to 100% of the medical scheme rate, but that doesn’t mean you’re fully protected.

Health care providers and practitioners do not need to comply with regulations when it comes to fees. They can charge over 100%, which can put you in a troublesome position.

Luckily, gap cover comes with several benefits. Let’s take a look at these benefits below.

Medical aid gap cover assists with cancer procedures

This type of cover has once-off benefits that can be used in the situation of:

  • A first-time cancer diagnosis
  • Accidental full disability
  • Accidental permanent disability, or
  • Accidental death.

Gap cover helps with certain casualty fees

Stromtroopers carrying injured stormtrooper in stretcher

Many people who have visited casualty have had the doubly unpleasant experience of having to pay the resulting expenses themselves. Luckily, some gap cover products include a benefit that helps you with any casualty-related expenses.

Offers coverage of certain co-payments

Some medical procedures attract co-payments or fees that are not covered by medical aid. These types of procedures include, among others, radiology scans and claims associated with oncology.

Thankfully, gap cover bridges the shortfall and can cover co-payments.

Secures peace of mind and is inexpensive

Protection against the unforeseen and unknown goes a long way in securing your family’s hopes for the future.

Obtaining gap cover means that in the instance you or a family member are hospitalised, you won’t have any sneaky costs making an already-scary situation worse.

Parent holding her baby's hand

In addition, the premiums for this type of insurance product are not expensive, especially when compared to the extensive benefits they offer you and your loved ones.

That said, you must do the research on the gap cover products available and how they work in alignment with your medical aid scheme.

At Maysure Financial Services, we use Turnberry as our Gap Cover product. More on this below.

Turnberry Gap Cover

We at Maysure use Turnberry as a gap cover short-term insurance provider. We believe it to be one of the top gap cover providers South Africa has to offer.

Their products offer benefits including, but not limited to:

  • Protection against unforeseen medical expense shortfalls
  • Provision of comprehensive cancer benefits
  • Enhancement of medical aid schemes by up to 500% of medical aid rates
  • Affordable prices
  • Coverage for Defined Procedures
  • Extended family cover
  • Emergency assistance by air, land, or sea

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Please do not hesitate to get in touch for further information or to make arrangements:

+27 11 839 2302

info@maysure.za.com

Myths about Life Cover Featured
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Debunking Myths About Life Cover

Life happens when you least expect it. In the current world climate, the topic on everyone’s lips is planning for the future. While checking that all your affairs are in order, you might want to consider adding life cover to your financial planning.

Life cover can act as a tool to help you meet your medium and long-term goals. It provides a form of surety when you or your family need financial cover the most. This cover offers the sense of security your loved ones need long after you are gone.

Yet, despite these attractive features, some people still feel that life cover is unnecessary. This is due in part to a number of myths about it. This post will debunk a few of these theories and tell you everything you need to know about life cover.

Myth #1: Life Cover Is Not Important

Main with children in field

The primary purpose of life cover is to provide financial assistance to the family upon the death of the insured person. This makes it a crucial tool for anyone with dependents. It is particularly necessary for individuals with accumulated debt.

Most commonly, life cover is used to protect kids or spouses, but it’s also a good option for people with other financial goals. For example, if you don’t have assets to pass onto your heirs, life cover can help you create an estate plan and inheritance for those you name as beneficiaries. It can be a great way to set up a solid financial future for your family.

Some products even provide a payout if you become disabled or critically ill. This ensures you continue to pay the bills even in times of personal crisis. It could help to alleviate financial burdens while you get back on your feet.

Myth #2: You Only Need Life Cover When You Are Older

Man smiling about Life Cover

People at the beginning of their careers tend to focus on material investments, but life cover can be a good asset at any age. Anyone who is financially capable should invest in life cover. In fact, the sooner you take it out the better.

Multiple factors are taken into account when calculating how much you pay for life cover. Younger people with no pre-existing health conditions are more likely to receive lower premiums. They are also considered low risk because they are less likely to claim.

Life cover isn’t just for homeowners or parents. Anyone you choose can be added as a beneficiary, which means that other family members can benefit too.

Proceeds can be left to pay off a student loan, support a needy family member, or even donate to your favourite charity. The list is not limited to people who depend on you financially.

Life insurance can even provide a safety net to small business owners. This will help cushion the blow for any employees or partners who need to keep the business going.

Being young doesn’t exempt you from bad things happening. Road accidents or unforeseen illness can be a huge financial hindrance for someone at the start of their career. While medical aid might be able to take care of hospital expenses, it can’t ensure you an income while you recover.

Myth #3: Insurers Never Payout

Hand and wallet

For life cover, beneficiaries are nominated to receive a specific amount in the event of your death. Different policies provide cover for different structured needs. Your life cover can go towards your home or other living expenses. It can also be used to settle outstanding debt.

There are two ways life cover can pay out. Your loved ones could receive a lump sum, depending on the amount designated. Alternatively, life cover can provide regular earnings for your family.

These take the form of a series of consistent payouts, which act as an income to cover their needs. An assessment of your family’s long and short-term needs can help to choose a plan that best suits you.

Be aware that some policies contain exclusions in their terms and conditions. You need to review your life cover to know what you are being covered for. Knowing these exclusions could save your family the pain of having to debate over your policy’s conditions when you are gone.

Myth #4: Life Cover Is Expensive

South African money

Everyone has different needs. Each individual can find a policy that best accommodates him or her. Maysure is a financial advisory service that can help you find a life cover that is good for you and your pocket.

You shouldn’t be put off of life cover because of the cost. There are plenty of options out there and a number of ways to reduce your monthly premium.

Taking a lower cover amount, getting a policy when you are young, or even just quitting smoking are all ways that you can save on life cover.

Final Thoughts On Life Cover

The truth is when it comes to life cover you can’t afford to not have it. It is the ultimate form of financial protection and is sure to give you peace of mind.

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Let us help you choose the right life cover. Contact us here:

+27 11 839 2302

info@maysure.za.com

1024 683 Maysure Financial Services

Dreaded Disease Cover

Being diagnosed with a dreaded disease can have a severe emotional and financial impact on your family. While having dread disease cover won’t completely remove the impact of the disease on the entire family, it will lighten the emotional load by giving your family what it needs to keep going, security in knowing that the financial side of things will be covered.

Dread disease cover is an insurance policy that protects you should you contract one of the diseases on the predetermined list of illnesses with your policy provider. As the policy holder, once you have been diagnosed with a dread disease, you may be paid out a lump sum should you have the benefit on your existing policy.

The contract terms contain specific rules that define when a diagnosis of a critical illness is considered valid. It may state that the diagnosis need be made by a physician who specialises in that disease or condition, or it may name specific tests, e.g. EKG changes of a myocardial infarction, that confirm the diagnosis.

“Henk Meintjes, Head of Risk Product Development at Liberty, said that more young people than ever before are being diagnosed with illnesses like cancer and cardiovascular disease. Cancer is the top claim cause at 24.3% [of our number of claims], and cardiovascular conditions a close second at 20%. And while cancer affects people of all ages, it was 16% for young achievers – the millennials – and 21% for young parents.” via Health24

Serious illnesses are a reality for us all, but the sooner you are diagnosed, the sooner you can act, and get the treatment you need. We are starting to see that dread disease’s do not discriminate, it doesn’t matter how old you are or what stage of life you’re at, anyone is at risk of contracting any of these diseases. While genes play a part, not everyone who contracts one of these diseases has a family history of the illness, this means that now, more than ever it’s essential to have a dread disease benefit to protect your finances should you contract a life-threatening illness.

With medical advancements you are more likely to survive a major health crisis, than to die from one, but the financial strain can impact your family, self-esteem and ability to keep going emotionally.

In 2018 PPS paid out R266,150,250.00 in cancer claims alone, with a total of R541,665,520.00 in sickness benefits that covered not only cancer, but diseases of the musculoskeletal system and connective tissue, diseases of the circulatory system, psychological illness and more. Refer to our post PPS: 2018 in Reviewfor more details on causes and conditions most claimed for last year.

These policies can cover you against cancer, stroke, coronary artery bypass, heart disease and more. Speak to your broker about what is on the predetermined list on your current policy or to apply for dread disease cover via your existing policy or through a new application.

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PPS: 2018 In Review

PPS released their review of 2018 in their document “It Adds Up”.

What makes PPS unique as a financial services provider is that they are dedicated to graduate professionals, their business is based on creating targeted insurance products for professionals.

They are constantly evolving and adapting to be at the forefront of global technology innovation that affects how their members do what they have been trained to do, and the decisions and actions they take are solely based on member interests.

Having delivered satisfactory growth for their members in 2018, with R3.2 billion rand paid out in benefits, and R634.6 million in profit share allocation.

What you need to know about the Profit share account:

It is made up of 2 components, the Apportionment Account, and the Special Benefit account.

The Apportionment account is made up of the share of your monthly contributions to qualifying PPS products, and the Special Benefit account is made up of investment portfolio of PPS group.  The Special benefit account has in certain client portfolios reduced and this was due to the poor market conditions that were experienced in 2018.

Looking at 2018 in Review, this is what you need to know:

  1. Profit Share Allocations to Members in 2018: R634.6 million
  2. Benefits Paid to Members in 2018: R3.2 billion
  3. Exit Payments to Members in 2018: R1. billion
  4. Life Cover Paid out for Members in 2018: R511.8 million
  5. Sickness Benefits Paid out to Members in 2018: R541.7 million
  6. Critical Illness Benefits Paid out to Members in 2018: R216.0 million
  7. Permanent Incapacity Benefits Paid out to Members in 2018: R466.8 million
  8. Lump Sum Disability Benefits Paid out to Members in 2018: R151.5 million.
  9. Total Cancer Claims Paid for all products to Members in 2018: R266.2 million
  10. Motor and Household Benefits Paid to Members in 2018: R132.8 million

The causes and conditions most claimed for:

  • Life Cover Top 3 Causes
    • Neurological
    • -Injury
    • Cancer
  • Sickness Benefits Top 3 Causes
    • Diseases of the musculoskeletal system and connective tissue
    • Injury
    • Cancer
  • Critical Illness Top 3 Causes
    • Cancer
    • Cardiovascular diseases
    • Diseases of the circulatory system
  • Permanent Incapacity Top 2 Causes
    • Diseases of the musculoskeletal system and connective tissue
    • Psychological illness
  • Lump Sum Disability Top 3 Causes
    • Cancer
    • Diseases of the musculoskeletal system and connective tissue
    • Psychological illness

Cancer and diseases of the musculoskeletal system and connective tissue are the most common illnesses claimed for in 2018.

If you would like more information on your PPS profit share allocation, or to review your current products feel free to contact us:

? 011 839 2302

? info@maysure.za.com

? www.maysure.co.za

900 491 Maysure Financial Services

Maysure Financial Services: Company Profile

Since 2003 the founders of Maysure Financial Services have believed that life happens – whether we plan it, don’t plan it, save for it, don’t save for it, expect it, or don’t expect it…. It happens. But how your life has happened doesn’t dictate how it must be lived. It is simply a journey that you are on, and everything that you have experienced along the way has brought you to this point, and dictates the road you will take from here on out.

Whether you are at the beginning of your journey, or a long way down the path, a specialised team will help you set a firm financial focus and guide you as your journey continues, specifically when it comes to your retirement and estate planning.

Should you be of the Muslim faith, you will have access to a dedicated Muslim team that understand that your earnings must always remain wholesome and pure, this team will guide you with your Sharia Investments and estate planning so as ensure that your journey is sustained and nourished by that which is Halaal.

We believe that your savings are the first step on your journey to your future – we apply expert, large scale, corporate savings principals to your investments, whilst still maintaining the personal, hands on approach of a small firm.

Maysure Financial Services is built on 3 solid propositions:

Serving you – we want to show you how to take your existing wealth and with some uniquely adapted and personalised guidance, turn it into the ground where your future takes root, the ground where you can start saving towards your dreams, passions and goals.

Services that are adapted to your circumstances – they are inspired by your life. The financial service instruments that we offer are as varied as your journey, and your circumstances will determine which services we will offer you to ensure that your unique financial goals are reached.

An understanding of that which is most important to you – Planning your future financial security should not be taken lightly. Our intention is to make your journey one that ends in financial independence, especially because the path is can be so strongly determined by simple consistency. With the right amount of experience, a firm grasp of the latest technology and a personal, hands on approach, our goal is for you hold the key to financial freedom.

SERVICES

When we are inspired by life to make choices that benefit ourselves and our families, it can be very daunting. This is where Maysure’s expert team steps in.

Our range of financial planning services include:

Retirement Planning
We all dream of being able to spend our time as we choose to. It may seem like an inconceivable notion, but effective retirement planning is exactly that – The process of setting retirement income goals and making the decision to do whatever is necessary to achieve them, in order to live your best life.
Effective retirement planning is essential to ensure that you accumulate the necessary funds necessary to give you financial freedom when you no longer enjoy the advantage of receiving a salary.

Sharia investments and estate planning
Sharia law acts as a code for living that all Muslims should adhere to, and this applies to investments and estate planning too. All earnings are to remain wholesome and pure, and no investments should be used for “sin” industries such as alcohol, tobacco, pornography as well as what can be considered unethical industries such as gambling, arms and weaponry.
Being secure in the knowledge that your investments are Halaal and pure is essential to ensure peace of mind; allowing you to graciously reap the rewards of what you have sown.

Investments – Unit Trusts, Endowments and Tax Free
You can empower yourself greatly by understanding the tax on your savings. Different tax structures apply to different investments and knowing exactly what you have and what you’re going to gain is an integral part of financial planning.
Understanding your investment portfolio is essential to ensure that you really are getting the most bang for your bucks.

Life Cover
Life happens, whether we plan for it or not. Having sufficient life cover ensures that the legacy of love that you leave behind for your family is not tainted by financial worries. Life cover can be reinvested to provide your family with an income and also used to cover any outstanding debt that you may have accumulated.
Ensuring the financial freedom of those you love in the event of your death is essential to ensure that they will not be burdened by financial strain and live the life that envisioned for them.

Medical Aid
Life is a precious gift and a well constructed medical aid ensures that you are able to pay for any treatment expenses incurred with regards to your health and wellbeing, on both a day to day basis and an emergency contingent.
Comprehensive medical aid is essential to ensure that you will not be burdened with debilitating medical bills should you fall ill.

Estate Planning
Your estate is comprised of everything that you own – your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions etc. Estate planning is ensuring that your asset base is managed in the event of your incapacitation or death in an appropriate and financially savvy way.
Estate planning is essential to protect your loved ones, because without a plan in place, there could be a long-lasting negative impact on their future.

Offshore Investing
Offshore Investing allows you to spread your investment risk across different economies and regions. It also gives you access to industries and companies that may not be available locally.
Being strategic with your offshore investment is essential to allow you to make adjustments to your investment portfolio to accommodate the ebb and flow of well performing international markets and maximise your returns.

Fiduciary Services
Being in the position to leave a legacy is a wonderful gift, but it is also a complex one that must be thought through carefully. Fiduciary services help you preserve, grow and distribute your wealth the way you want, both during your lifetime and the lifetimes of your loved ones.
With a thorough fiduciary plan comes financial peace of mind, allowing you to focus on the important things in life – living it the best way you can.

We pride ourselves on a providing a personalised service because we are a small, tight knit team; but our investment tactics and guidance are based on solid corporate principals that are applied across the board, no matter the size of the portfolio.