If your hand shot straight up like an overly zealous kid, eager to impress the schoolteacher, you might be super-confident that you have the correct answer, but are you 100% sure car and home insurance is the right answer?
Unfortunately, it’s not 🙁
Yes, you need vehicle and home insurance cover in place to protect your high-ticket items from theft and damage, but when you take a step back to think about it, insuring yourself (and your ability to earn an income) must be the conclusive answer to that question.
This is why…
Over the past few hundred years, the world has changed. It sounds like a very long time, but in the grand scheme of things, it’s a blip on our evolutionary radar. The industrial revolution meant we started moving into cities to work in factories and instead of tending fields and growing our crops, we started stamping timecards and buying things. The mass production of goods simply meant more people could have a full-time job and afford a line of credit to buy the house and car they could only dream of, up until that point.
Fast forward to 2022 and not much has changed in the last 50 years.
Most of us work very hard to pay off our debt.
The internet arrived, but that only made our work and life much busier and more demanding. It certainly doesn’t solve the issue of getting our debt repayments sorted out on time, regardless of the circumstances or how many crazy curve balls life hurtles at us.
We are all highly geared and only a few missed paycheques away from a financial disaster. It’s the unfortunate reality of living in the 21st century, and COVID re-emphasized how precarious most of our situations are. The world can literally come to a grinding halt, as the wheels of commerce seize up and the flow of money, that we all dip into, simply comes to a halt.
And while we can’t insure against every eventuality, we can insure against getting ill and not being able to work. Yes, a medical aid picks up the big-ticket items associated with landing up in the hospital, but what if an illness means you can’t work for several months?
Salary Protection cover does exactly what its name suggests.
In the event of you being unable to work because of an illness or injury, the policy will kick in and replace your salary. This is normally capped at 75% of your net income or “take-home” salary.
Let’s assume your take-home salary is R20 000 per month and you have a policy like this in place. You could expect a pay out of R15 000 per month to kick in if you needed to claim against your cover.
If you belong to a company Retirement Fund, then you might want to check in with HR to see if the fund includes a Group Life policy. That’s important because sometimes the pension or provident fund also includes extra insurance benefits like life, disability and salary protection.
You can’t insure your salary twice, so if your group scheme has you covered, then you might only be able to top-up your cover. If you don’t belong to a company group scheme, then you really must look into a Salary Protection policy.
Remember that policies like these don’t cover retrenchment and are specifically designed to kick in if you fall ill or become disabled. The policy stops paying out when you are fully recovered, and if your situation is unfortunate and you don’t recover, most of the policy wordings will give you peace of mind that until the age 60 or 65 you can expect the monthly contributions.
Life is full of surprises and the only thing we can do is make sure that we evaluate our personal risks and then make the right choices to cover them.
Your income holds just about everything (at least the material stuff) together like glue and while we all sometimes wish we lived in a world where money simply grew on trees, we know we have to get up every day and give up quite a bit of ourselves in exchange for that income.
The sensible thing we can all do is make sure we protect our income.
Need a quote for Salary Protection cover? Why not get in touch with us today.
Until next time
The Wise About Life Team
