Karen Bongers, Product Development Actuary at Sanlam Individual Life,
Successive lockdowns have put myriad jobs in jeopardy, impacting everyone, from salaried workers and freelancers to business owners.
Lay-offs and retrenchments have been rife, with increased inflation simultaneously exacerbating a bad situation. With so many uncertainties impacting job security, career changes and the adoption of side hustles are not uncommon. Income protection policies are meant to protect you against the risk of not being able to work as a result of illness or injury, but have they kept up with the changing times?
There are some common concerns people may have when it comes to income protection in this ever-changing world of work. When seeking or reviewing cover, these are some of the questions to ask in order to live with financial confidence.
Will changes to your occupation impact the terms of your cover?
In the current environment of lockdown regulations, many people are changing careers in search of a more stable income. So, it’s important to ask if you need to inform your insurer of a change in occupation and what this may mean for cover. Unlike the vast majority of insurance providers, Sanlam does not require clients to let them know about occupation changes. An example could be a travel agent who specialised in international travel pre-2020. She may choose to make a career change by starting her own business in a completely unrelated industry, to avoid the volatility and uncertainty that has become the new normal within the tourism sector. With Sanlam she will be as fully covered for her new occupation as she was for her old, irrespective of how the daily duties of her workday have changed.
It is important to provide the correct information about your occupation(s) when applying for a policy, as this determines the terms and cost of your cover, but that Sanlam does not require you to inform them of subsequent changes. At Sanlam we take the risk of future changes in your occupation on ourselves and stick to the original terms of your cover. At claim stage, our team will assess your ability to earn based on the occupation you perform at the time.
Can you get cover if you supplement your income with a side hustle?
With more people exploring temporary contracts or side hustles to supplement their income in this difficult economic climate, it is good to know that having a variable income is not a stumbling block to obtaining income protection insurance. While the appropriate cover amount for a traditional salaried employee in permanent employment is perhaps more apparent, clients such as contract workers who have variable incomes can also get cover.
Are you covered when you’re between jobs?
Normally, clients are only covered for their occupation while they are actively working. This can prove problematic, especially in the context of the current economic environment where retrenchments are not uncommon. Half a million South Africans lost their jobs last year, adding to an already high unemployment rate and severely impacting income security. If a client were to become sick or permanently disabled during this time, they might not have a valid payout as they were not practicing their occupation at the time of the claim event. With Sanlam’s Extended Sick Leave and Extended Occupational Disability Cover features, occupational cover is extended for a further 12 months from the time a client stops working, for any reason other than retirement, including retrenchment.
In instances where occupational cover does not apply, Bongers explains that it is imperative for an income benefit to have a strong impairment underpin to protect the client irrespective of their employment status, noting that the list of impairment claim events of the new Sanlam Income Protector range is particularly comprehensive.
Can you get cover considering your occupation and medical history?
Certain occupations have not qualified for income benefits in the past. Bongers says, “Sanlam’s new range includes an Impairment Income benefit to cover most of these previously excluded occupations and our new Accidental Income benefits, a first in the market, can also cater for those who are not able to qualify for income protection due to their medical history, enabling the widest possible range of clients to gain access to the advantages of income protection cover.”
One’s income will remain one’s greatest asset. At Sanlam, we remain committed to providing our clients with proper cover so that in changing times, we ensure that we keep to our promise of meeting our clients’ needs.