Creating a secure financial future is something that many wish to achieve. Be it through investments, earning a higher salary, or the high number of funeral and life insurance policies that South Africans apply for.
However, a recent report by FMI revealed that many people are blindsided to the cost of becoming injured or falling ill; which can impact any emergency saving they might have in place-if saving at all.
Injury and illnesses are leaving many financially exposed
Sustaining an injury or illness that can put you out of action is something that most working South Africans tend to overlook. According to recent research by FMI 2018 claims statistics, 7 out of 10 are likely to have an injury or illness that can prevent them from earning an income. Furthermore, the research revealed that South Africans are misjudging the risk that they face. Instead, we tend to overestimate the risk of death, leaving many unprepared to handle the unexpected cost that comes with temporary disability or illness which is concerning.
Unexpected costs are known to put holes in a budget. This is more so when your sickness or injury lasts longer than expected, running any reserved funds low. Craig Baker, CEO of MiWayLife, says, “It is not something new where people who are young and healthy tend to delay the process of taking out a life insurance policy or disability cover due to the fallacy of being invisible to things such as disability or illnesses. However, the report by FMI shows that this is not true as people who are in the age group of 25 – 32 years old are 92% likely to sustain a temporary disability that can prevent them from working for 14 days or more. This can be a scary number if you have little to no savings in place.”
You may be telling yourself that there is always tomorrow, but tomorrow can be too late. Even when you are healthy and in your best shape. Accidents do happen, and these could become costly. Having some form of financial protection is possible and can be affordable. Comparing insurers along with the premiums that come with their policies is a good way to ensure that you are getting value for money. "It is vital to choose something suitable for your needs. You can always start small and gradually adapt your policy for various life stage needs. Even if you do not have dependents, it is important to have some form of cover than none. You can get a life insurance cover that comes with a built-in funeral benefit that can cover your extended family members and critical illness under one premium for as little as R149,” says Baker.
Always remember to read the terms and conditions that come with your cover. Keep in mind that these differ from insurer to insurer. Most importantly, read the inclusions and exclusions that come with it as not all long-term claims cover permanent disabilities.
This article first appeared on Bizzcomunity