Income Protection

Once you have weighed up all your investment options, you need to consider income protection. This covers much more than just disability and hospital cover. Income protection includes aspects such as life and health insurance (medical aid), business insurance (if applicable) and your short-term insurance. In addition, you need to put away some savings in the event of a rainy day. By “rainy day”, I am not referring to a car breakdown or leaking geyser! I am referring to retrenchment, job loss for any reason, sudden disability, dreaded disease such as cancer or HIV/AIDS or the death of a loved one.

Finding a suitable company to cover your insurance needs is not too difficult but as with any contract you enter into with a company, it is important to read the fine print. Make sure that the company you choose to insure with has a good track record. Check on sites such as hellopeter.co.za for real customer reviews on the companies you are considering.

Life Insurance: A life insurance policy is a contract between yourself and a life insurance company to pay out the insured amount to a beneficiary, specified by you, upon your death. Finding a company to give you multiple quotes for life insurance is relatively easy. Be sure to compare the different quotes you receive in order to get the highest possible payout for your monthly premium. This lump sum will assist your loved ones in continuing their present quality of life after your death.

Medical Aid: Medical aid, is a policy you take out with a medical aid scheme. Under the policy, you are the beneficiary but no funds are paid out to you per se. Rather, this policy will cover your medical expenses when you need to go to the doctor or hospital. They will usually also cover your pharmaceutical expenses in case you need prescription medication. Take note of the different plans medical schemes offer as some will only cover emergency hospitalisation and not out of hospital GP, optometrist or dentist visits.

Income Protection policies: There are also many companies that offer income protection policies. These will not cover medical expenses in the event of an accident or hospitalization, but will rather pay out a lump sum to you upon hospitalization. These payouts are generally calculated based on the amount of time you spend in the hospital. For example, your policy may cover you for R5000 per day spent in hospital. In addition, these policies usually also have cover to pay out one large lump sum to you in the event of contracting a dread disease such as cancer of HIV/AIDS. Again, be sure to compare the range of different policies offered by different companies. Decide what you can afford to pay per month and compare the policies that fall in your range to ensure you get the most bang for your buck.