Tuesday, 29 January 2013
One of the toughest, yet often overlooked, challenges facing young graduates is coming to terms with the fact that they are now responsible for their own financial security. For many, it marks the first time they have to take responsibility for their own financial affairs.
This is according to John Marsden, National Sales Director at PPS, the financial services provider focused on graduate professionals, who says it is vital for young professionals to start implementing a sound financial plan as soon as they enter the workforce. “This includes making sure that they have comprehensive insurance cover as soon as possible, particularly as they may already have some financial commitments.
“One of the first financial burdens for most new graduates is paying off a student loan. However, with the assistance of an experienced financial planner, this can be both easy and affordable for most graduates, ensuring that they do not leave a huge financial strain for loved ones should something unforeseen occur and they are unable to make the payments.”
“It is important for new graduates to realise that taking out their own insurance cover now could not only save their lives but also make a crucial difference between living a comfortable life or facing severe financial strain in the future.”
Marsden says an important form of insurance is income protection, which can make a real difference for those who are unable to work. “Shortly after graduating, one of our members – a newly qualified medical doctor – was involved in a devastating motorcar accident, resulting in complete paralysis known as the ‘locked-in syndrome’ and marking the end of his career. Due to his disability he could not earn any income as a doctor, however, with income protection he is now able to continue life as per normal by means of a monthly incapacity benefit.”
“Very few graduates consider the possibility of an untimely illness, disability or death and thus paying for insurance cover that they might not use does not seem very appealing. However, obtaining insurance policies at a younger age is often far cheaper due to the fact that young people are generally healthier.”
He says in addition to income protection, taking out good medical aid cover is also vital for graduates, as it provides access to proper medical care and ensures they are not stuck with huge medical bills should they need urgent medical treatment or hospitalisation.
“Most graduates are uncertain where to start when it comes to financial planning, so it is best to contact a professional. Consulting with an accredited financial advisor will not only assist the graduate in being prepared for the unexpected, but also in building their wealth from an early age and laying the path down for a stable career,” concludes Marsden.