What is Income Protection?
Insurance protecting your ability to earn an income.
Income Protection ensures you continue to receive an income, even when you are unable to work (due to an illness or disability).
Why do I need it?
Your ability to earn an income is your greatest asset and all expenses including insurance policies, your mortgage and phone bills are dependent on this asset.
Income Protection covers this asset and should be at the top of your “must have” insurance products list.
What is Capital Disability?
Capital Disability is the term used to describe a lump sum payment that would be paid to you if you were to become permanently disabled
Do I need Capital Disability and Income Protection?
Income protection looks after future living expenses should you become unable to work (due to an illness or disability) while Capital Disability covers immediate needs associated with a permanent disability such as buying a wheelchair or making your home disability friendly.
That is why a mix of both products is ideal.
Temporary disability, which is covered by income protection, has proven to be more common. In 2010 82% of claims lodged with FMI were temporary and lasted less than 3 months.
Income protection can be structured to pay benefits during and after the first six months following the date of a claim, a period during which capital disability products generally will not pay out.
Due to temporary disability claims lasting a shorter term, waiting periods are shorter and multiple claims can be made. Capital Disability products generally have longer waiting periods that could worsen any financial strain already felt.
Waiting period? What is that?
A waiting period is the number of days you have to wait before you receive your claim payout.
This is a cost effective way of sieving out trivial claims to make your premium more affordable.
If there wasn’t a waiting period we would be getting all kinds of claims for common illnesses and disabilities e.g. colds / flu etc that only last a few days.
Due to temporary disability claims being of a temporary nature, waiting periods are shorter and multiple claims can be made.
Who is income protection for?
Business Owners and the Self-Employed
Self-employed and financially self-reliant people carry a greater risk of not being able to sustain their personal income from their business should they be unable to work due to an accident or illness.
Every financial commitment, including medical aid premiums, retirement funding and cell phone bills would all be in jeopardy should their personal income be disrupted.
What are my options?
TIP (Temporary Income Protection) is an ideal solution for individuals who require financial security should they be unable to perform the duties of their own occupation for less than 24 months.
BOP (Business Overhead Protector) offers protection for important business running expenses that will still be incurred during the incapacitation of the business owner.
Permanent Income Protector (PIP) has been designed to dovetail with TIP to provide uninterrupted income protection cover up until a selected age of retirement.
Being a business owner means you may also feel an obligation to provide cover for your employees and any risks that they may face. FMI’s Vision product enables employees to cover themselves and their families when dealing with unforeseen events that may leave them unable to work and earn an income.
Salaried employees also have to worry about where their next pay cheque will come from if an illness or an injury takes away their ability to work. Often sick leave is not sufficient and extended periods of time off work could leave you at risk of losing your job.
Statistics from Arrive Alive and the Road Accident Fund (RAF) confirm that younger people are four times more likely to fall victim to an accident than older drivers, and are therefore most definitely at risk of being disabled or unable to work. These statistics point to a very real need in the market for a benefit specifically designed for younger people.
FMI have recognised this need and developed an Accident Only Benefit offered to those aged 32 or younger.
This benefit requires no medical underwriting and has been kept as simple as possible to make it easier for young people entering the insurance market to understand the product.
For the first 3 years, the policy will be accident only cover at 50% of the premium. On the third policy anniversary this benefit automatically upgrades to full cover and full premium, for both accident and illness benefits.
You and your Family
The Policyholder can add a Spouse Benefit to their policy, which pays a benefit for up to 2 months in the event that the Life Insured’s spouse is unable to work.
While preparing for motherhood and taking on the responsibilities that come with having a child, the last thing a woman would want to worry about are the financial implications.
FMI’s pregnancy and childbirth special limited benefit will pay a one month TIP and BOP benefit to all female clients following the birth of a child.
While being part of a family and enjoying all the special moments that come with it, there are some grim realities that one may have to face, such as falling ill with a dread disease or a family member being diagnosed with a dread disease.
The Life Insured can include a Child Dread Disease Benefit of R20 000, which is payable in the event that their child is diagnosed with a listed dread disease.
The Dread Disease Enhancer offers cover to the Life Insured in the event of a TIP claim being related to a listed dread disease and will enhance the TIP benefit by 20%.