If you are a working person with or without dependents, disability cover is an essential type of insurance that you shouldn’t be without. If you are injured or involved in an accident and find that you are unable to work, the impact on your lifestyle could be dramatic. Disability cover will pay you out a lump sum that can be invested and provide you with an income.
Does everyone need disability cover?
Unlike life insurance cover which is designed to assist other people (your dependents and beneficiaries) after your death, disability cover will ensure that you continue to support yourself even if you can not work as the result of an injury or illness.
Because you will still have day-to-day expenses and regular payments to make even if you become disabled, this type of cover is essential for any working person who can not afford to retire yet – that includes over 90% of working people.
The financial impact of a disability
We tend to forget that the financial impact of a disability goes beyond losing an income – if you become disabled you’ll not only lose your regular salary, but your living expenses may actually increase due to your being disabled.
The costs that disability can bring may run into thousands of Rand each month. These include specialised equipment, physiotherapy sessions, doctor’s visits and possibly having to modify your house to accommodate your disability. If you are unable to work, how will you pay for these additional costs as well as your monthly living costs?
Choosing the right amount of disability cover
Your disability cover is usually calculated by taking your income, assets, and liabilities into consideration. Ideally, your disability cover should allow you to receive the same amount each month as your last monthly salary so that you can continue to pay your expenses each month as before.
If you have a large amount of outstanding debt, you should ensure that your disability cover will allow this debt to be paid off if you’re no longer able to work. Please send me an email if you wish to re-evaluate your disability cover.
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