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SA's No 1 Insurance Blog

Do you need income replacement cover? You might start by asking yourself a few questions.

  • Do you bring the moola home?

If YES, then it’s obvious that not being able to earn a living, will leave your family in a very sticky situation. In households where the family income responsibility is evenly shared between the husband and wife, the risk of total financial collapse, should one of them become ill or disabled and no be able to work, is far less than if one family members has the sole responsibility of bringing home of the bacon.

  • Could my family handle the change?

Your spouse might be contributing as much as you financially, but what changes will your family need to overcome should your income disappear? Get a pen and paper and do the sums. Will your kids be forced to go to another school? Will you need to get rid of the new car? The reality is that without enough income, to cover your monthly expenses, something will need to give. Change will be inevitable and uncomfortable.

  • Does my employer offer any type of income protection cover?

Most large companies have pension / provident funds in place, and in most cases attached to that retirement fund benefit is a group risk policy, which covers employees against disability and illness. You need to check if income replacement is part of the group benefits offered by your company. It’s important because you can’t insure your income twice. If you have income protection in place at your company, you can’t take out cover in your individual capacity. However, if you don’t have any group cover in place at work, then you are at risk and you should take out income replacement cover in your personal capacity.

  • Are you involved in a risky job?

It’s fair to say that if you are a sales rep driving around town the entire day, you are at a higher risk of becoming disabled than someone who’s parked behind a desk for 8 hours. If you are involved in an occupation that carries a fair share of risk, you should evaluate that risk and the financial impact it might have on you, should you become disabled.

  • What is the impact of not making a decision today?


You probably know the answer to that question already.

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