I bought my first annuity when I was 22. Few questions were asked; I was actually flattered that a big company contacted me to set up a portfolio with them. For the last two years, we haven’t had a financial broker, for several reasons: bad service, their inability to answer real questions, and our own hesitation re the insurance topic.

Last month I decided to tackle our portfolio and get real answers and see if we can manage this monster ourselves. But sadly, I had to surrender! I thought having a background in chartered accountancy would assist to better understand what risks were covered and what opportunities were highlighted. Unfortunately, it only helped to ask more questions and, with even fewer answers, this meant a complete mistrust in our insurance portfolio.

What became very clear was that the ‘promised retirement’ maturities and even ‘guaranteed life’ covers in the early 2000s no longer existed after the 2007/08 global meltdown. Although South Africans were protected by our Credit Act, lots of us are unaware of how this event really impacted us going forward.

Almost defeated, one of the big boys contacted us for a face-to-face appointment to see how they might be able to assist clarifying that they were not trying to sell anything.

Although the meeting brought no answers, it confirmed what our research and conversations already had. The meeting brought clarity to the disruption that the insurance industry is facing from a consumer and supplier side.

Previously I’ve written about disruptive innovation and now I saw it first hand.

There was still a sale to be made, though. It wasn’t a product for now but a plan for what you want from your life or business.

I like the idea as it aligns with individualised plans, but plans you have to provide. And how independent is a plan produced by the company that sells you the products?

What is sad is that you are only told about this when you start asking questions. What about those that are too busy to be asking? And how will the lack of change affect their end goals of assumed guarantees or maturities at a ripe old age?

With no guide or recipe, we continue regardless. We are carving a plan that hopefully aligns with our life, passions, challenges, opportunities and real-life happenings. We are considering what we want our lives and businesses to look like when the kids are out of the house.

What are you doing?

Our plan (for now)

Devise a life plan that includes dreams, kids and their departure, and opportunities and liabilities now and then.

Taking stock of our risk portfolio balance sheet brings information. What are the probabilities that these will actually pay out when needed? What is your risk appetite at different ages and for different life plan options?

Then defining and managing your budget – top to bottom and controlling what you can (most of the time: spending) and look for opportunities between the lines that can have a direct impact on your future financial plans?

For us, it means cancelling products, for example – for you, it may mean something else. With a confirmed new, ever-evolving life plan with insurance (in new forms) supporting that.

Author: Stanford Payne CA(SA) is an ICF-accredited executive and business coach