By: Motshabi Nomvethe, Head of Technical Marketing PPS
As a graduate professional, you have worked hard to establish your career and earn a comfortable income. However, have you ever considered what would happen if you were unable to work due to illness, injury or disability? Without a reliable income, your day-to-day expenses and financial commitments could become overwhelming, risking your lifestyle and your family’s well-being.
Your income is your greatest asset, as it safeguards your income by providing a replacement or supplementing your income when you are unable to work. Whether it is sickness, disease, trauma, an accident, hospitalisation, or partial or even permanent disability, income protection ensures that your bills are paid and your lifestyle is maintained while you focus on recovering. This gives you the financial freedom to know that you can maintain your lifestyle, cover essential expenses and provide for your loved ones. Imagine the financial stress you would face if you suddenly lost your monthly income. How would you manage your bills, such as your house bond, car loan, children’s education and insurance, if you were unable to work for months or even years?
Globally and including in South Africa, all income protection policies, including sickness benefits, have a sickness/disability definition, meaning that the policyholder will need to be ill or injured, whether temporarily or permanently, for there to be a claimable event. In most instances, life insurers expect the claimant to prove the loss of income they have suffered.
The PPS Sickness and Permanent Incapacity benefit is designed to pay the policyholder if they have been booked off and are unable to work due to sickness or injury. There is no need to have lost an income and the benefits received will not be aggregated against other income received.
At PPS, we firmly believe that income protection benefits are always the preferred option if the goal is to replace income. This benefit offers a monthly payment for the remainder of your working life, adjusted yearly to account for inflation. By assuming the risk and managing the capital, the insurer ensures you receive your “monthly salary” without worry.
Mutuality
-is supporting others,
while they support you.
At PPS, we operate under the ethos of mutuality, where members benefit from the success of all. As a member with a qualifying product, you automatically get a notional PPS Profit-Share Account ™, where your share of company returns will be allocated. It is a structure that helps us, our intermediaries and members grow.
Because success is everyone’s business.
Members holding qualifying products share in the profit or loss of PPS through the notional PPS Profit-Share AccountTM and past performance is not necessarily indicative of future performance. PPS is a licensed life insurer, controlling company and FSP.
In general, the income level covered is usually based on a percentage of income and is often capped at 75% unless a buy-up option to 100% is bought. In most instances, this would mean that the policyholder will be covered at 100% of their income for the first two years of a claim. After the initial two-year period in claim, payments will reduce to cover 75% of their income. The PPS Sickness benefit covers members for 100% of their benefit from the first day of the seven-day waiting period.
It easily transitions through case management to a Permanent incapacity benefit if the illness lasts longer than 728 days. The Permanent Incapacity benefit will pay until the chosen retirement age.
While income protection insurance may appear more expensive compared to lump-sum disability benefits, it offers far greater security and value for money. With income protection, you receive a fixed monthly payment throughout your working life, regardless of your age at the time of disability. In contrast, lump-sum disability benefits provide a one-time payment requiring careful management
to ensure it lasts for the necessary duration. It is crucial to invest the capital conservatively, allowing regular withdrawals while accounting for expenses and taxes, all while keeping pace with inflation.
Considering that insurance policies are underwritten based on your health, current age and lifestyle habits, it is wise to take out cover as early as possible in your career. The longer one waits, the more likely one will pay a higher premium.
Do not let the uncertainty of the future jeopardise your hard-earned income and the lifestyle you have worked so hard to achieve. Invest in income protection insurance to ensure that you and your loved ones are financially protected in the event of illness, injury or disability. Take control of your future today and secure your peace of mind.