Did you know that in South Africa you are nine times more likely to experience a temporary disability than to have your car stolen or hijacked?
The Association for Savings and Investment South Africa (ASISA) reports South Africa’s current disability insurance gap sits at R19.3 trillion. For those aged 30 to 39 (about nine million earners), there’s an insurance gap value of R1.5 million per earner. An insurance gap means the gap in what these people are insured for compared to what they should be insured for – it shows how underinsured we generally are as a nation.
While disability risk increases with age, Moneyweb reports that a 25-year-old still has an 86% risk of a temporary disability, with an 8% chance of becoming permanently disabled. In fact, 92% of people aged 25 to 32 are likely to experience a temporary disability rendering them unable to work for 14 days or more.
Nonkululeko Zungu, Product Support Consultant at Sanlam Individual Life, says: “Often people mistakenly associate disabilities with one-in-a-million freak accidents. However, it is frequently depression, diabetes, heart disease, spinal injuries, back and joint disorders, arthritis and bone fractures that incapacitate people. Depression is one of the biggest ‘unseen’ disabilities globally.”
Myths around disabilities
Disabilities come with a lot of myths and misunderstandings. The first step is to understand that disabilities can happen to anyone. The next step is to unpack the different types of income cover and which ones work best for your specific circumstances.
Myth 1: all employers offer disability cover
Nonkululeko says that one of the big misconceptions is that all employers offer disability cover. “Many employers do choose to provide risk cover – for example life, funeral and disability cover – for their employees, but this is not standard practice. It’s more common for bigger businesses than small ones. It is vital to never just assume but to always ask whether an employer offers cover and how to access this. Remember, group plans may also come with limited cover that isn’t personalised to your profile. Plus, any cover could immediately fall away should you leave your employer.”
Myth 2: you’re fully covered by workers’ compensation
In South Africa, ‘all employers, as well as casual and full-time workers, who as a result of a workplace accident or work-related disease are injured, disabled, or killed, or become ill’ are entitled to compensation, according to the Compensation for Occupational Injuries and Diseases Act. But, only in specific circumstances. To be covered by workers’ compensation, the causes of the disability must be work-related – which is frequently not the case. Think of cancer, heart attacks, diabetes, back pain and arthritis, which cause most long-term disabilities.
Myth 3: you’re covered by your savings
The average duration of a long-term disability is 31.2 months – but it can be for a lifetime. Most people’s savings won’t stretch to cover their monthly expenses for this long. The long and the short of it is that South Africans need to better protect themselves against disability risks.