Busting myths around income protection

Bidvest Life's chief marketing officer, Zanele Ntulini, explains the benefits of having income protection insurance in the event of injury, illness or death.

FILE: Unemployed builders, tilers and plumbers hold signs seeking jobs on the side of the road in Johannesburg in November 2019. Picture: AFP

JOHANNESBURG – What if you couldn’t work because of injury or illness? Could you manage financially?

According to Bidvest Life’s research, a 30-year-old male has a 15% chance of dying before the end of his working career but a 91% chance of being unable to work for a period of two weeks or more during his working career.

Bidvest Life said that the COVID-19 pandemic highlighted the importance of income protection, especially for business owners and the self-employed.

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“Part of the reasons for this is that there’s just not enough awareness of income protection as an insurance category in South Africa”, said Zanele Ntulini, chief marketing officer at life insurer Bidvest Life.

Ntulini said that here were several popular myths around income protection that she was keen to bust, one of them being that Income protection was expensive.

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“Income protection is more affordable than you think. You can protect up to 100% of your after-tax income against life’s curveballs. You can decide to insure less than 100% of your income due to affordability, or simply because you don’t feel you need the full amount,” Ntulini explained.

Bidvest Life has embarked on a marketing campaign to educate South Africans about the importance of income protection, which they say is not always on top of the mind of consumers, unlike life or household contents insurance.

Ntulini said that income protection was not only for people with permanent employment but for any kind of hustler.

"Today, more people are working in the gig-economy as freelancers, contractors or have side hustles to supplement their incomes. We believe that all hard-working South Africans should be able to protect their income against the risk of an injury, illness, disability or death no matter how they earn their income. This is not a product that is exclusive to salaried individuals, but is accessible for business owners, self-employed and freelancers, commission earners, and even high-risk occupations such as artists and musicians, as well as non-income earners like students and homemakers," Ntulini said.

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Ntulini said that the myth that income protection did not pay out was false, saying that they had paid 92% of all claims made in 2020.

“Of the 8% of claims that weren’t paid, the leading cause of non-payment was that clients tried to make income protection claims within their waiting periods. In income protection terms, the waiting period is the number of days a policyholder must be sick or unable to work before a claim will start paying. If you’re not sure how waiting periods work, ask your financial adviser. They’ll be able to explain how different waiting periods can impact you, and what they mean when it comes to claims stage,” said Ntulini.