Why everyone should consider investing in disability cover
A recent study published in the Personality and Social Psychology Bulletin reported that it is extremely common for people to apply a positivity bias, also known as the Pollyanna Principle, where we over-estimate the possibility of things going well in our future and under-estimate the chance of things not actually going so great. Similarly, we tend to over-estimate how amazing it will feel when things do work out for us in the future and we tend to under-estimate how horrid it will be should things not work out.
One of the implications of these findings is that we should all take off our rose-coloured glasses and take a long, hard, and realistic look at what the future may hold and how we might feel about it.
What does this have to do with disability cover, you ask?
A lot, actually. Simply turning to the most recent census results will demonstrate this to you. Almost eight in every 100 South Africans are currently classified as disabled. What’s even more alarming is the fact that 53% of all South Africans older than 85 live with disability and as much as 22% of the population, aged five years and older, struggle with sight, hearing, communication, memory or walking difficulties.
We hate to be the bearer of bad news, but what these figures translate into is startling! It points to the fact that we are all a lot more likely to one day experience a disability and therefor require disability cover.
And considering the cost of health care or hiring a care-taker, it seems all the more logical to just get yourself disability insurance cover that will pay out should something dreaded happen to your health. With most disability insurance policies priced very affordably, it makes sense to pay a little every month, to avoid paying a lot when something unexpected happens.
Understanding disability cover and its benefits
Disability cover offers insurance benefits that pay out in the event of the policyholder becoming permanently disabled due to an injury or illness. There are two popular types of disability insurance policies. The first is often called disability income cover and offers your monthly income if you become seriously ill or disabled. This can help replace lost income, even if it is income that was lost over a couple of days only – like in the event of you having to take unpaid sick leave. The second type of cover, generally referred to as disability lump sum cover, pays out one lump sum instead of monthly benefits if you are declared disabled and/or unfit to continue working.
Depending on which one of these two options you prefer, you may get some of the following benefits:
- Total or partial disability cover
- Some temporary income protection cover
- Functional impairment cover (paying out should you be unable to perform your normal daily duties but have not been declared disabled)
How does it differ from income protection cover?
It may be helpful to keep the distinction between disability cover and income protection cover in mind. While they are often offered as additional add-on benefits, you can also take out a policy that offers one without the other. An income protector is more general, covering illness, disability as well as other conditions that result in your loss of income (such as having to care for an ill family member or being retrenched). By contracts, disability cover is more concerned with income lost as a result of you being unable or unfit to continue to earn your normal income.
Ps: Since it is Women’s Month, we are particularly appealing to women to educate themselves and to ensure that they have the necessary cover. This is really important because women in SA currently have a 3% greater chance than men do of becoming disabled.