Consider income protection

CRUCIAL: EARNING A LIVING IS YOUR MOST IMPORTANT ASSET, NOT YOUR CAR OR HOME

People underestimate the value of their ability to pay the bills and take care of their family.

If illness or injury stopped you from working for an extended period, would you be able to survive on savings or sick leave alone? Without your income, would you be able to pay everyday expenses, like your bond, rent, groceries or school fees and take care of your family and financial commitments?

If the answer is no, you might want to consider income protection.

Every year, tens of thousands of South Africans find themselves unable to work due to a serious illness or injury and income protection is designed to give you some cover if you can’t earn.

We often think of illness as a few days off, but don’t consider what would happen if we were unable to work for a longer period.

We underestimate the value of our earning ability.

Ask many people what their most valuable asset is, and they’re likely to say their house or their car.

They’re wrong. Your most important asset is your ability to earn an income – and protecting this asset is a wise thing to do.

This is particularly important at a time like this, during the Covid-19 pandemic.

Is there a way to guard against losing that income due to an unexpected illness or injury? What if you get retrenched?

Stangen managing director Marius Botha unpacks some of the most asked questions regarding income protection:

What is income protection?

It is an insurance policy designed to provide you with a replacement income if you can’t work because you’re ill or injured.

It ensures you receive a regular income until you can go back to work, or retire.

Why is income protection important?

The biggest risk most South Africans face isn’t dying: it’s losing their ability to earn an income before they retire.

Do I need income protection?

If illness or injury would mean you would not be able to pay your bills, you should consider income protection insurance.

How long do I have to wait to claim?

It depends on the terms and conditions of your policy. Generally, at Stangen, payments will start after you have been off work for three months and will be limited to 75% of your after-tax income immediately before you became disabled.

On confirmation of a disability, your monthly benefit will be payable until you recover, turn 65 or die, whichever comes first. – Citizen reporter