Disability Insurance
Have you considered the impact on you and your loved ones if something happened to you and you were unable to earn an income due to an unforeseen event, such as illness or injury? Shockingly, a personal finance article from December 2018 revealed that the disability rate in South Africa then was climbing and at that stage sitting at 7.5% of the population.
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Disability Insurance offers you the assurance that if the unexpected occurs, that there would be money to continue to pay for the monthly expenses that you do have, so that you, and your loved ones can carry on with their lifestyle they have become accustomed with.
It provides you with peace of mind knowing that if something happens to you, there would be funds to settle your major debts or structured as a monthly income to continue to pay your vehicle, insurance, healthcare and school fees.
Disablement is defined as being unable to perform your occupational duties due to illness or injury.
In South Africa there are a few different options of Disability Products available :
Lump Sum Disability Insurance
This is where you insure yourself for a capital amount (lump sum) that would be paid out in the event of permanent disablement. This is a well-suited product to incorporate into your portfolio to settle any major debts that the consumer has, which includes settling a mortgage, motor vehicles and loans.
Impairment Insurance
This is typically an insurance taken out that pays out an amount either based on a percentage of the sum assured or pays out 100% when you have suffered an impairment like loss of limb or loss of bodily function.
Income Disability Insurance
Protecting your earning ability is one of the most important things you can ever do. Unlike Lump Sum Disability Insurance, Income Disability Insurance would pay you an amount each month if you were temporarily or permanently disabled. Having an Income disability insurance product gives you certainty that you can continue with your current standard of living should you become disabled.
In South Africa income disability payments are paid net of any taxes.