Essentials of disability cover

Last updated on 22nd June, 2021 at 09:48 am

You cannot possibly protect yourself and your family from unforeseen events, but you can protect your ability to earn an income and provide for your loved ones.

Disability insurance gives you the assurance that you will still have an income should you become disabled because of injury or illness. There are two types of disability cover:

• Monthly disability insurance, which is ideal for self-employed people whose ability to earn an income may be in jeopardy if they fall ill or have to be hospitalised. Monthly disability insurance can be for temporary or permanent disabilities.

• A lump-sum benefit, which is paid out in full if you become permanently disabled. You will be declared permanently disabled when you can no longer practise the profession from which you have earned an income.

The lump sum is usually used to settle any outstanding debt or medical expenses, or for making the necessary changes to your home to enable you to lead as normal a life as possible.

Be aware of these potential snags

Waiting periods: In the case of temporary monthly disability cover, waiting periods may apply, ranging from seven to 30 days, or one to 24 months, which means you’ll have to be booked off for this duration before you can claim. Make sure you are aware of the applicable waiting period before you sign your policy document. Be specific: When you take out disability insurance, be as specific about your profession as possible. In other words, if you’re a surgeon and you lose a limb you should be insured for doing surgery, so your insurer therefore can’t expect you to become a lecturer or a researcher. Know your policy: There are specific circumstances under which a disability insurance policy will not pay out. Make sure you are aware of these exclusions before taking out the policy. Typical exclusions are drug or alcohol abuse, suicide or breaking the law. Be frank: Disclose all the relevant information, including previous medical conditions, when you are applying for disability insurance. If you deliberately withhold information, any future claims could be rejected. Stay in touch: Inform your insurer if you have changed jobs, or if any of your personal circumstances have changed that could increase or decrease your exposure to risk.

By Liesl Peyper

Find out more about Sanlam’s disability cover options – click here.