Loss of income cover in demand
TRADITIONAL breadwinners are turning to income protection cover as retrenchments, illness and injuries threaten their steady income.
A snap survey by Times Media also found more men were paid for loss of income protection last year than women.
Leading causes for the claims made were sickness and injury, including musculoskeletal diseases, accidents, poisoning and respiratory tract disorders.
At least one insurance company reported the claims were as a result of an increasing number of retrenchments.
Liberty said of its total claims for last year, 43% of men and 53% of women under 35 years claimed for loss of income.
The insurer’s head of risk production development, Henk Meintjes, said Liberty had seen a steady increase in retrenchment claims due to the struggling economy.
Meintjes said middle and high income earners were taking up income protection, noting that “thousands of individuals are retrenched every month”.
“Being retrenched is emotionally challenging and scary – the prospect of maintaining your general living expenses can be very stressful,” Meintjes said.
The unemployment rate in South Africa increased to 26.4% in the first quarter of this year from 24.3% in the same quarter last year.
Economist Chris Hart said those in the middle end of the job market could find value in benefits such as loss of income or retrenchment protection.
“These individuals – most of whom are young people – are the most vulnerable. They are at risk of losing everything and do not have much protection.”
Other insurance companies saw an increase in protection cover, more on illness and injuries.
Of the R1-billion PPS Insurance paid in claims last year, just over R629-million was paid for temporary loss of income in both sickness and permanent incapacity benefits.
Sanlam paid R48.3-million for its sickness and income protector benefit claims out of the R2.697-billion it paid out last year.
Both insurers revealed 60% men were paid out for loss of income protection claims, while women accounted for 40% of similar claims.
Discovery Life paid over R128million for claims against the income continuation benefit (42% by women and 58% by men), from over R2.3-billion in total claims paid.