Since the recession hit, job losses have rippled across most industries, leaving thousands of people unemployed and unable to make ends meet.
According to figures released by Statistics South Africa, the country’s unemployment rate increased from 23.6% of the labour force in the second quarter of this year to 24.5% in the third quarter, with the total number of unemployed people sitting at a staggering 4.19-million in September 2009.
While retrenchments and unemployment continue to rise, companies in the recovery phase following the recession don’t seem to be hiring. A recent survey by the South African Recruiters Network to review the impact of the recession on recruitment showed that 22% of companies have put a freeze on hiring, with 56% saying they are only replacing critical roles. Several large companies report that they are hiring less than 20 new employees per year.
This decline is also reflected in the number of positions handled by recruitment companies, with 72% of recruitment agencies now placing less than five candidates a month.
“There are undoubtedly countless South African households in a state of panic about how they are going to make ends meet. Many families depend on two incomes to stay financially buoyant, and losing one income forces them to make very drastic sacrifices just to make ends meet. This means cutting expenses on the household budget, and oftentimes neglecting to pay bills,” says Bradley Du Chenne, spokesperson for Dial Direct Insurance, adding that insurance, being what many might consider a non-necessity or even a grudge expense, is typically one of the first monthly costs to be neglected.
Du Chenne urges consumers to consider other avenues for cost-cutting before neglecting to pay their short term insurance.
"Allowing your policy to lapse leaves you wide open to the many risks that insurance is there to protect you against. Without insurance, you risk being left in an extremely precarious situation if your car or any of your possessions are lost, damaged or stolen. With money already tight, how would you afford a new car if yours was stolen?” he questions.
Dial Direct offers its clients free premium waiver cover for six months if the policyholder is unable to pay the premium due to retrenchment or dread disease. This means their insurance premiums will be covered for up to six months, without their policy lapsing, while they get back on their feet.
Du Chenne advises consumers who find themselves in a tight spot financially, where they are unable to afford their insurance payments, to speak to their insurance company.