It can’t happen to me - The realities of disability

Almost 2 million self-employed and commission workers in South Africa are dangerously under-insured when it comes to disability, according to a recent independent survey from True South Actuaries in Cape Town.

Brad Toerien, CEO of FMI, says this shortfall is “truly alarming given that any kind of accident or serious illness can radically disrupt cash flow for self-employed people and cause a major life crisis if the proper cover is not in place.”

Too many self-employed people, according to Toerien, simply assume that disability “cannot happen to me” and also do not appreciate that a temporarily disabling event like a broken arm or serious flu can have significant financial consequences.

He urges every person who does not have the benefit of substantial company cover for disability or illness to urgently re-assess what would happen if their income was suddenly cut off. How long could they survive without that income? What would happen to their business or their family without their income?

Toerien particularly advises self-employed people to take out cover against temporary disability, “These policies are designed to kick in really quickly on a wide range of disabling events and deliver immediate support, whereas permanent disability claims can take a long time to be confirmed and paid out.”

He also cautions against relying solely on big lump sum pay-outs for permanent disability, “Such pay-outs are seductive in theory but often come short in reality and place enormous pressure on the individual to make major investment decisions”.

In Toerien’s view, a policy which provides temporary and permanent income protection (with guaranteed monthly payments and a once off lump sum) is the best way to ensure real peace of mind and proper income protection.

To learn more, visit www.fmi.co.za

                                                   Protecting your income

Almost 2 million self-employed and commission workers in South Africa are dangerously under-insured when it comes to disability, according to a recent independent survey from True South Actuaries.
 
Any kind of accident or serious illness can radically disrupt cash flow for self-employed people and cause a major life crisis if the proper cover is not in place. Income protection is insurance designed to protect an individual’s ability to earn an income. It will replace income in the event that an individual cannot work due to unforeseen circumstances.

Brad Toerien, CEO of FMI, says there are five very common mistakes made in this area:

• Taking too much Life cover and not having enough Income Protection in place

• Only securing cover for permanent disability and not for the far more common likelihood of temporary disability

• Not ensuring that you are covered for temporary disabilities, as a result of illness or physical injury, that could have a major impact on your ability to earn your income

• Opting exclusively for a lump sum pay-out in the event of permanent disability rather than selecting a combination of guaranteed monthly payments and a lump sum pay-out

• Failing to properly calculate the amount that would really be needed to permit a self-employed person to maintain their lifestyle in the event of a disability

To learn more about holistic income protection, tailored to suit individual income protection needs, visit www.fmi.co.za