Updated 24 July 2013

The tough get salary protection

What can you do to make sure you're financially secure?


Realistically, what do you think would happen if you fell so gravely ill that you couldn’t work for several months? What would happen if you were retrenched because of reasons beyond your control? Without a regular, unwavering income, it would be near impossible to survive. So what can you do to make sure you’re financially secure, should one of the above occur?

Two words: salary protection

Statistically, one in every ten employees is covered by company-provided salary protection. If they qualify for cover and their claim is accepted, they would receive a considerable percentage of their previous earnings as a monthly payout.

The uninsured would probably be reliant on their employer's willingness to continue paying them. Employers are not obliged to keep paying staff members in these situations and, the more generous among them, tend to pay a full salary for three months and then half for the next three. In the worst-case scenario, the newly unemployed might consider selling their assets, like their home or car. This isn’t an ideal situation; if you’ve been retrenched, and you’re without a house or vehicle, finding another job is going to be unfeasible.

You may enjoy living on the edge, but often a leap of faith can result in a rough landing at rock bottom. The bottom line is, it isn’t worth the risk not having salary protection.

How much income insurance do you need?

Income protection insurance is typically determined by the portion of your salary you want to cover. Generally, it provides for up to 75% of your salary – for up to six months - should you be unable to work.

Consider what the costs are of paying off a mortgage, a vehicle and any other debts or bills you may have. The point of salary cover is to facilitate a sustainable income stream if you are out of work for a period of up to six months, so make sure you take all your current and possible future expenses and obligations into account when signing up for income insurance.

What should I be paying for salary protection?

There’s no definitive answer to this question as every cover plan is determined by the policy holder’s personal details and habits. One way to make sure you find the right product for your needs is to shop around and compare cover and prices. Premiums typically depend on details such as

  • age
  • gender
  • health
  • smoking habits
  • occupation
  • current salary

Your premiums will go up or down depending on these factors. When signing for income insurance, ask these important questions: what’s covered, what’s not covered, and what will the insurance premiums cost now and later.

Salary protection from FRANK.NET

FRANK.NET is a straightforward and easy-to-understand insurance company that offers income protection for your financial security and stability should you find yourself unable to work. Contact FRANK  today and get a free salary protection quote now.

(FRANK.NET, August 2011)


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