When most people take out insurance, they are planning for the worst case scenario, like death as a result of a freak accident or, in the case of a disability, a permanent change in lifestyle. But very few people have cover for a temporary disability – one that keeps the individual away from work for just long enough to have an impact on earnings and lifestyle. This is especially true in the case of a small business owner who must generate a monthly income and therefore needs Income Protection. Income Protection is about more than just a disability payment – it ensures continuity of income if the insured cannot generate an income.
Income Protection for permanent and temporary disability
Most industry players consider disability in a generic sense rather than seeing permanent and temporary disability as two different types of risk that need to be protected separately. This thinking is re-enforced by most FNA tools which simple calculate a client’s disability needs, with emphasis on permanent cover. This approach may leave gaps in your disability portfolio, especially when it comes to temporary disability, which is more likely to occur than permanent disability. In addition, while three out of ten people are likely to suffer a temporary disability in their working lives, temporary disability may occur more than once in a lifetime. In 2011, our claim statistics revealed that 47% of our temporary claims were part of a multiple claim on behalf of the policyholder. As a rule, capital disability benefits do not cover temporary disabilities and do not allow for multiple claims.
Do you worry about what would happen to you if you were disabled? If you have permanent disability cover in place, probably not. But do you know what kind of cover you have? And the risks involved?
True or False?
1. I know what kind of cover I have in place.
2. I know the difference between Lump Sum Disability cover and Permanent Income Protection.
3. I understand the advantages and risks of both types of cover.
4. I am covered if I suffer a long temporary disability.
5. If I am disabled and cannot work, I can survive the waiting period before permanent disability is
established.
If you answered ‘False’ to any of the above, you may not be completely covered for a permanent disability. FMI advocates a holistic approach that combines Permanent Income Protection and Lump Sum Disability to ensure complete cover for permanent disability.
Please contact me urgently for more information!
