Updated 23 October 2013

Don’t let your salary get disabled

Rule number one for an effective life investment plan is: never undervalue the importance of your paycheck. If disability strikes, you don’t want to be left with nothing.

Most people’s plans for the future, from buying a home to paying for their children’s education to saving for retirement, rely on the assumption that they will be able to work and continue to earn an income until they retire. Yet most of us continue to overlook the true value of our income while we have it. Rule number one for an effective life investment plan is that you should never undervalue the importance of your paycheck.

Lenerd Louw, CEO of says, “The reality is that the financial consequences of suffering a disability can end up costing you a good few million rand in future earnings if you were to become permanently disabled and were unable to work and earn an income. You need to be prepared in the event that you are not able to do your job. If disability strikes you don’t want to be left with nothing but debt.”

Very few people have disability cover. The Association for Savings and Investment South Africa (ASISA) estimates that during the course of the next year, 52,000 South Africans will suffer total and permanent disability. That is 140 people each day.

“The average adult is much more likely to suffer a disability than die,” says Louw, “and being disabled can have a massive impact on how you live for the next few years.”

Disability insurance provides you with a lump sum to help you deal with your new situation. This amount may help you to clear debts, adjust your lifestyle and provide the capital base to add to your future income. “Disability cover could cost you as little as R150 a month which will get you about R100,000,000 worth of cover,” says Louw.

What policy to get? “Look for a straightforward policy,” says Louw. “Be careful of those that have long waiting periods and check the benefit period. Often it is better to receive a lump sum payment rather than a monthly payment with a limitation on length. And ensure you know what falls inside the policy, and what you’re not covered for.”

(Source:, July 2011)


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