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Disability Cover and Your Bond

Tuesday, 27 October 2009 16:50

While most insurance policyholders have a number of policies to cater for a number of perils, including car insurance, home insurance, medical and life insurance, they fail to adequately cater for risk of disability. Life and death are not the only options, and your employee benefits may not provide full cover.

Many companies offer employee benefits in terms of pension, medical and disability cover. These are important but often inadequate. There is usually about a 30-percent gap between one’s current salary and the salary they earn off a disability fund. Even if it’s still possible to work after becoming disabled, the impediment usually results in a less demanding lower paying role.

The problem though, is that you are still obligated to pay your bond, school fees, car payments and other debt you may have even after becoming disabled. In fact you’ll have to pay more in terms of medical bills, treatment and therapy. If you’re just covering your debt now, a disability could be financial ruin. Personal Protection Policies cover this risk, or make up for the difference between your disability fund and the salary you need. They, like car insurance, come in three essential sizes.

Capital Benefit, which is a lump sum after the accidental death of the policyholder.
Permanent Disability which renders someone incapable of carrying out their everyday occupation.
Temporary Total Disability which renders someone incapable of carrying out their everyday occupation for a couple of months.

In these three instances, a personal protection plan will make up for the shortfall between earnings and debt after a disability. Your protection policy protects you from reduced earnings that will result from a disability.

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