When we’re expecting our first child, we’re quick to put life insurance policies in place. But what about protecting our human capital from disability? Most people see life insurance as a no-brainer to protect themselves against losing their income due to death. But few people consider protecting their human capital in the event they become sick or injured, when we’re actually far more likely to become disabled in our working careers.
When you’re in the early or middle stages of your career, there are few (if any) assets more valuable than your ability to earn an income. If you’re unsure whether you should have disability cover, consider the following questions:
Do you rely on a paycheque?
Most of us would most certainly answer this with a “yes”. And that reliance becomes even more pronounced if you’re married or have children because others likely depend on your contribution to the household.
The need for disability cover will decrease as you approach retirement (and have fewer and fewer paycheques to protect). However, if you have children, the need for disability cover increases drastically, as their financial needs inevitably increase with age and comprise a larger proportion of where you direct your paycheques.
Do you have everyday expenses?
Again, the majority of us can say that we do. And you may be thinking that just because you don’t do a dangerous job, such as one that requires a lot of travelling, you’re less prone to getting injured, and thus don’t require disability cover.
But, 90% of long-term disabilities result from illness, rather than injuries, meaning that disabilities can occur – no matter what job you do. And if you don’t have disability cover, you risk not being able to cover your everyday expenses such as paying regular bills or keeping up with your larger financial plan.
Do you have dependants?
You probably do. And even if you don’t have dependants, you still need to be able to financially take care of yourself, in the event that you become disabled. Disabilities happen more often than you think, and it can have a negative impact on both you and your family.
Take this year’s long Easter weekend for example – where most of us drove to spend time with our family (dependants) and friends – there were over 100 reported motor vehicle fatalities. And the people that were injured in car accidents would need their disability cover to help them and their families replace any loss of income.
What disability cover should you take out?
Now that you know how important disability cover is, you might be considering what disability cover to take out. With BrightRock, you can have peace of mind knowing that you and your family will be protected in the event that you suffer a temporary or permanent disability. BrightRock’s needs-matched cover changes as your needs change. Because your cover meets your needs precisely, there’s no waste – so you’ll get 40% more cover for every premium rand. They don’t do aggregation against active income for permanent or temporary disability claims (so if you’re still able to earn an income once your claim has been approved despite your disability, BrightRock won’t reduce your pay-out), and you can decide exactly how much cover you want, for the most appropriate amount of time.
Accidents can happen anywhere, at any time – and illness can strike anyone. Don’t leave a gaping hole in your otherwise comprehensive financial picture. Use this as the nudge you may need to stop procrastinating and start protecting your most important asset.
This article was originally published on Money Marketing on 28 May 2019. Click here to read the original online version.