Income Tax Planning

South Africans pay a variety of taxes, which include income tax, value-added tax, capital gains tax, donation tax, transfer duty and estate duty. These taxes are levied not only on natural persons, but also juristic persons, for example companies, trusts, close corporations and estate of deceased persons.

Life Insurance

In terms of its definition in the Long-term Insurance Act, a life policy as a class of business refers to a contract between an individual and an insurer.

A Life Policy is an insurance policy for risk cover (risk in this context is the loss eent which is covered by the insurance policy). The contracting party or owner of the life policy agrees to pay premiums to an insurer. The insurer, in return, undertakes to provide benefits in either their provided scenarios.

Long Term Insurance is the business of providing or undertaking to provide policy benefits under long-term policies. The intention of this business therefore is to provide cover for a long period, which is generally longer than 5 years.

Life Insurance is not indeminity insurance. This means that the owner of the policy (the policy holder) can choose his own level of cover, the sum assured, whether he is insuring his own life or that of a family member ir debtor. In principle, a principle, a person can place almost any value on the life to be insured and implement insurance for that value, subject to affordability and underwriting criteria.

Short Term Insurance

Short Term Insurance forms part of wealth protection, and in this case it is the protection of one's property and belongings. Short-term insurance is broadly divided into two main focus areas: personal lines and commercial lines. Personal lines focus on insurance for the private individual and are also known as domestic insurance, while commercial lines are concerned with short-term insurance for businesses. Short Term insurance is governed by the provisions of the Short-term Insurance Act 53 of 1998.

Investment Advice

Once a wealth creation need has been determined, and investor has to make two important decisions when making an investment: he needs to select an investment product/vehicle and an investment fund, also called an investment portfolio.

The investment vehicle is the vehicle or wrapper which will house the investment and which will have important tax and liquidity implications for the investor.

Examples of the investment vehicles include endowment policies, sinking funds, retirement annuities and other retirement funds, banks accounts, unit trusts, etc.

Retirement Planning

One of the fundamental principles of investment is the phenomenon to as the time value of money (TVM). TVM is based on the fact that R1 today is worth more than R1 sometime in the future. The effect of TVM is that the amouunt of money can increase in value because of interest earned from that money (investment) over time, but on the other side also loses a portion of its purchasing power because of inflation.

Thus by saying that the value of money today is not equal to the value of money tomorrow, we imply that money has a present value (PV) and a future value (FV).

Estate Planning

Personal financial planning focuses on the needs of the private individual. The primary objective of financial planning is to create financial independence for clients at the various stages of their lives. Financial independence produces a certain lifestyle and it is the uniqueness of each person's desired or actual lifestyle that demands that a financial planner consider certain issues or events when conducting financial planning exercises.

Medical Aids

Medical Schemes offer a range of benefit/plan options, including basic care through a network of designated services providers (DSP) such as Medicross, hospital only plans, hospital and day-to-day care are fully comprehensive plan options covering all medical needs.

These plans obviously range in cost too. Therefore, a needs analysis would need to be conducted with the client to assess his medical needs, taking affordability into account so that the most suited plan and provider can be chosen.

Note that where DSPs are allocated, the scheme must still pay for healthcare costs at the nearest provider if a client cannot reach a designated service provider in an emergency.

The client/patient can be transferred later, when stablilized, to a DSP.

In term of section 33, medical schemes are required to submit and obtain approval form the Council of Medical Schemes for all benefit options offered to clients.