Protecting yourself with illness and injury cover

Disability cover is designed to protect your future income earning ability, should you not be able to work due to serious injury, accident or illness.

While most of us will reach retirement age, there will be some who won't. An untimely death, disability or severe illness can have severe financial consequences for a family. If your family is fortunate to have enough existing assets and investments to provide for the future, then this type of insurance won’t be necessary.

What type of cover should you take out?

There are two forms of disability cover: lump sum cover and monthly income protection. Both have a role to play, but if you had to choose between them, then income protection would probably be the better option because there is more likelihood of a payout in the event of sickness or a partial or short-term disability.

Many of us who are in regular employment make the fundamental mistake of believing that the disability assurance attached to our group life assurance will be sufficient to meet all our financial needs, should we become disabled. The truth is that this type of assurance will do no more than meet the costs of your most basic necessities.

Do they payout?

Contrary to popular belief, insurance companies don’t try to avoid claims. There have been many payouts over the years that have come to a family's financial rescue. But it is vital to fully disclose your medical history at the application stage. You don’t want to run the risk of your claim being refused due to non-disclosure. Insurance companies only get one chance to assess the risk of insuring someone for many years into the future, and it is only fair that they have access to all relevant medical information in order to arrive at their decision.

How much does it cost?

Monthly premiums are based on your risk profile - that is the probability of you becoming disabled, and the level of cover you would require if you did. The most important issue is your health, and the life assurance company may require you to have a medical examination.

Your premiums will also depend on a number of other factors, such as:

Your age.
Your personal habits, for example, you will pay more if you smoke or drink heavily
The nature of your job and hobbies. You may pay more if you have a high-risk job, such as working down a mine, or find hang-gliding relaxing
The level of disability assurance you want, for example, whether you want to be assured against not being able to perform your own particular job or any other job.

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Protecting yourself with illness and injury cover

What type of cover should you take out?

Do they payout?

How much does it cost?

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