In uncertain times it may be tempting to cut your insurance, but here are the policies you need to consider to cover you.
You insure your car and your home, but arguably your most important asset is your ability to earn an income. Insuring yourself against the unknown can help to secure the wellbeing of yourself and your loved ones, whatever life may throw your way.
The types of cover to consider in uncertain times include:
Sickness benefit
In the event that you aren’t able to work, a sickness benefit will enable you to maintain your lifestyle and take care of your family. Once activated, the policy will make regular payments when you have been placed on sick leave by a medical practitioner due to illness, injury or pregnancy complications.
Sickness benefits are usually available to selected graduate and professional clients, and are typically structured with a short waiting period to qualify for a claim of between 7 and 30 days, with pay-outs lasting from 3 to 24 months.
Temporary and extended disability income benefits
These benefits provide cover in the event you become disabled, to work on either a temporary or longer term basis following, for example, a heart attack or fractured leg, or any other illness or injury resulting in a loss of income. Temporary disability income benefits will protect you when the inability to work typically lasts more than a month, for up to 24 months. Extended disability income benefits will continue the protection for the longer term, including in the case of permanent disability.
Petrie Marx, Product Actuary at Sanlam Individual Life explains: “Permanent disability means you won’t be able to return to your regular job in order to look after yourself or your family anymore. In uncertain financial times, it’s likely to be even harder than usual to find alternative employment, if you are capable of still earning an income. That’s why it is so important to insure your regular skills and abilities.”
It’s also possible for business owners to take out additional amounts of cover to pay for the regular overhead expenses of the business, for example, rent and staff salaries, when the business is unable to function due to the temporary inability of the owner to continue working.
The cover you should never cut during tough times
When you’re struggling financially, it may be tempting to relinquish insurance policies entirely. But Marx warns against this approach. “It is better to prioritise the types of protection you need most, and take less cover than none at all,” he explains. “Anything can happen in the world that we live in. If something unforeseen happens to you, your financial responsibilities actually expand. Cover is important because we don’t know what the future holds.”