The true cost of a disability

UNMANAGEABLE: LIFE CAN BECOME EXPENSIVE AFTER A DISABLING ILLNESS OR INJURY

- Eric Jordaan

As a highly specialized area of financial planning, reviewing your disability cover demands far more than a scan of your policy schedule. The market is saturated with new product variations, emerging insurers, complex terminology and shifting definitions of what qualifies as a disability—making this one of the more intricate fields to navigate.

We provide advice to policyholders on how to evaluate the cover they have to ensure that it aligns with their needs.

Understand your evolving risk profile

One's personal and financial circumstances are constantly shifting—often more quickly than one realizes. To properly assess your disability cover needs, consider the risks you face if illness or injury were to prevent you from earning an income. Has your debt increased since taking out your cover? Could you settle your liabilities if you were permanently disabled? Have your living expenses escalated?

Lump-sum disability cover remains an effective way to pay off debt and protect your estate, but it's essential to consider how your income would be replaced in both temporary and permanent disability scenarios.

Whether you are the primary breadwinner, self-employed, or dependent on variable income, your income replacement strategy must reflect your current life stage and liabilities. It's also important to assess your lifestyle and occupational risks: do you travel frequently, work in dangerous areas, or participate in high-risk recreational activities?

Key takeaway: Many policyholders underestimate the likelihood of disability from illness, so ensure your cover extends beyond accidents.

Take inventory of your existing cover