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Cover You Actually Need in Uncertain Times

By Petrie Marx, 11 September 2020

In uncertain times it may be tempting to cut your insurance, but there are important policies you need to consider keeping to cover you in the long run. You insure your car and your home, but arguably your most important asset is your ability to earn an income.

More than 2.8 million South Africans are living with disabilities, but most of the population does not have adequate disability cover. Insuring yourself against the unknown can help to secure the wellbeing of yourself and your loved ones, whatever life may throw your way.

Petrie Marx, Product Actuary at Sanlam, highlights the types of cover to consider in uncertain times.

Sickness Benefit

If you aren’t able to work, a sickness benefit will enable you to maintain your lifestyle and take care of your family. Once activated, the policy will make regular payments when you have been placed on sick leave by a medical practitioner due to illness, injury or pregnancy complications.

Sickness benefits are usually available to selected graduate and professional clients and are typically structured with a short waiting period to qualify for a claim of between 7 and 30 days, with payouts lasting from 3 to 24 months.

Disability Income Benefits

These benefits provide cover in the event that you become disabled to work on either a temporary or longer term basis following, for example, a heart attack or fractured leg, or any other illness or injury resulting in a loss of income. Temporary disability income benefits will protect you when the inability to work typically lasts more than a month, for up to 24 months. Extended disability income benefits will continue the protection for the longer term, including in the case of permanent disability.

Marx explains that permanent disability means you won’t be able to return to your regular job to look after yourself or your family anymore. In uncertain financial times, it’s likely to be even harder than usual to find alternative employment, if you are capable of still earning an income, which is why it is so important to insure your regular skills and abilities.

It’s also possible for business owners to take out additional amounts of cover to pay for the regular overhead expenses of the business, for example rent and staff salaries, when the business is unable to function due to the temporary inability of the owner to continue working. Your insurance provider might have already informed you about your cover taking into consideration the COVID-19 pandemic. If you have not received communication about how the pandemic affects your cover, reach out to them to clarify these details.

Cover You Shouldn’t Cut During Tough Times

When you’re struggling financially, it may be tempting to relinquish insurance policies entirely. But Marx warns against this approach. “It is better to prioritise the types of protection you need most, and take less cover than none at all,” he explains. “Anything can happen in the world that we live in. If something unforeseen happens to you, your financial responsibilities expand. Cover is important because we don’t know what the future holds.”

Marx notes that since lockdown measures have begun to ease, Sanlam has reintroduced medical services providing more safe and secure options to clients who need to complete medical requirements for new policies. These include:

  • Client access to general practitioners and nurses – Sanlam has reintroduced travelling nurses who are able to visit clients at their places of work or homes
  • Access to pathology laboratories – clients are able to access pathology laboratories for any blood tests which need to be conducted
  • Access to specific Sanlam offices which house nursing staff to carry out medical tests in a safe manner

Talk to a Financial Planner

If you’re in any doubt about what to do with your money when you fall on hard times, it’s best to contact an accredited financial planner. They could help you in tough situations to ensure you still have the cover you need to fall back on while ensuring your premiums are affordable until you get back on your feet, concludes Marx.

Sanlam Life Insurance is a licensed financial service provider.
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