It’s not the easiest subject to raise – people don’t like to talk about unfortunate events that may leave them temporarily disabled or compromised for life and unable to continue their careers. The hard reality is that unexpected health issues and accidents do happen. And just as you need to be prepared for a robbery or loss of life by shoring up with insurance, being prepared for the unexpected with regard to physical or mental capacity is a topic we often relegate to future discussion.
But future discussion may well be too late. It’s no good looking for the solution once the event has taken place; you have to assume the issue presumptive as soon as you begin a working life, a family, and driving a vehicle. The possibility of becoming disabled and unable to work may not be top of mind when you are young, but keeping yourself covered for this unthinkable possibility is simply one of the most important precautions you can take.
Some hard facts to face
- Ninety percent of disabilities are caused by illnesses rather than accidents.
- One in four of today’s 20 year-olds can expect to be out of work for at least a year because of a disabling condition before they reach normal retirement age.
- The top five reasons for long-term disability claims include: musculoskeletal disorders; cancer; pregnancy; mental health issues, including depression and anxiety; and injuries such as fractures, sprains, and strains of muscles and ligaments.
- Health conditions such as: heart disease, cancer, arthritis, stroke and Type 2 diabetes, are among the chronic illnesses that can interrupt someone’s time on the job. Sudden severe health issues include: heart attack, aneurysm, traumatic brain or spinal cord injury – and recovery time for any one of these may be a year or longer.
Key reasons to take out disability insurance
Everyone is at risk
Should you become ill and have to miss work for several weeks or months, the resultant loss of income can take a toll on your life, even in excess to the illness, bringing about a dire financial situation for both yourself and your family. It is critical that you ensure you have an income to sustain your home while you deal with stabilisation and hopefully, recovery from your health issue. It is sobering to note that, for some individuals, it may require as long as two, three, or even four years of treatment and rehabilitation to reach a level of stability that will allow you to return to work.
When your employer’s insurance is not enough
The average plan may only cover around 60 percent of your salary – and then possibly only for six months. When you have an individual disability insurance policy, it can supplement your employer’s coverage and bring you up to the full financial relief you may need – and also supply benefits for longer.
Setting up your own coverage
Most employers do offer some sort of short-term disability coverage, with some employers offering longer term coverage, but this is less common. That is why it is vital that you consider setting up your own disability insurance policy. Most importantly, your disability coverage shouldn’t be a matter of “set it and forget it”. It is crucial to assess your coverage regularly.
The family factor
At any stage, whether you have dependents or not, you need to ensure your income for a potential period of disablement. However, if you have a family, children or elderly parents, you will need to protect them in the same way as you would need to do with life insurance.
The elimination period
The time between the onset of your disability and when you begin to receive payments is known as the elimination period, and you probably won’t have control over it when on your employer’s plan. With an individual plan, however, it’s possible for a policyholder to determine their own elimination period.
By purchasing your own disability insurance policy, you can take advantage of various options for lifetime benefits, or supplement your retirement plan. Arm yourself with as much knowledge and advice as possible before you make your decisions.
Check your policies, check your life
VeriFi is an online tool that provides you with an immediate and up-to-date overview of all your life insurance and investment policies by sourcing information from all the major life insurance companies – and presenting the information in a comprehensive report.
With VeriFi you are able, for no charge, to access information on all your life and investment policies at a glance. You are able to check the types of policies you have, the names of the insurance companies providing the cover, the nature and extent of the insurance cover provided – and other vitally important information such as the details on your policies being correct.
To find out more, please visit: www.verifi.co.za