How Disability Insurance Can Save You And Your Family From Severe Hardship

Explaining Disability Insurance And How You Can Use It

Insurance provides protection against various risks, and one such risk is the risk of a disability. Injury or illness could result in your inability to remain in an active productive state, meaning that you lose the ability to generate income. An auto accident, for instance, could result in a spinal cord injury, which, for all practical purposes, could mean that you become physically dependent for a long time, if not for life. Certain illnesses could also result in being bed-ridden for a long time. The capacity to earn active income, in such circumstance, will, at best, be severely limited. To possibly complicate matters, your expenditure profile may be significantly raised by increased medical bills and the provision of care you require. So, how would you cope, should anything near this kind of fate befall you? Even when your ability to work and earn income is only partially or temporarily lost, the implications for your well-being and that of your dependants could still be disastrous.

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Disability Insurance To The Rescue
One of the measures that can substantially enhance your capacity to withstand sudden disability is a disability insurance cover. Like any insurance policy that will have validity, you don't wait till such occurrence before taking the protection. Insurance is about having the foresight to recognise the reality that things could go wrong in life, and taking timely steps to buy into a pool of protection, at little cost relative to the potential risk covered. It is enough to suffer a serious reversal of fortune which disability spells, but bearing the financial burden of meeting running expenses without generating earnings could be extremely devastating. With disability insurance, you are, to the extent of your cover, empowered to withstand the financial challenge that disability could throw up.

What Disability Insurance Does For You
Disability insurance covers you against the loss of income in the event of long-term illness or injury which prevents you from working. In effect, the policy pays you to replace the income you are no longer able to earn. The benefits to receive (whether your salary at time of disability, percentage thereof or other settlement) will be as stated in the policy and reflected in the premium you pay.

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Is there A Significant Risk To Justify Such Policy?
Most likely, your response to this will be pretty quick: I don't need this policy because it's not my portion to have any disability. While saying 'amen', one is tempted to draw attention to the other reality that things do go wrong sometimes. Statistics are not readily available here, but show that even in developed societies with dependable healthcare, the risk of disability is significantly high. Many people will temporarily or permanently lose their ability to work and generate income, due to illness or accidents. The rate, for obvious reasons, will be higher in our environment. There is therefore a risk worth looking at, as you strive to fend for your family and plan for their future.

What To Do
Consider some level of income protection, against disability, as one pillar of your effort to build a stable financial future. Your financial plan today may be based on the expectation that a continuous income stream will be available to you. Recognise however that something could go wrong with that calculation. If an employer has provided a disability policy that protects your earnings, crosscheck that the value is adequate. If there is no protection (your employer hasn't provided or you are not in employment), the stakes are even higher. Give it a serious thought and you may see the justification to speak to an insurer.

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