Buy online
Disability insurance gives families financial stability when an income earner becomes disabled and can no longer earn an income. There are many different types of disability insurance such as lump sum policies for permanent disability and income protection policies for temporary disability. We explain the different disability insurance policies and share how to compare disability income insurance options.
Disability insurance is critical for young families
As of 2022, over 3 million people in South Africa are disabled, with many facing financial hardship. The situation is particularly dire when the disabled person was supporting a young family and can no longer do so because of their disability. The 2022 ASISA Gap study found that without disability insurance, the average South African family would have to reduce their expenses by 33% if an income earner became disabled.
Disability insurance offers financial stability by ensuring that you can continue to care for your family if you become disabled.
What is disability insurance?
Disability insurance pays an amount for a valid claim when a person becomes disabled. This can be used to replace income and fund living expenses of the life assured and their family, as well as pay for healthcare costs and home and car adaptations such as installing wheelchair ramps. Pay-outs are tax free. If you are unable to work and earn because of a disability, your family can use the pay-out from your disability insurance policy to maintain their standard of living.
Looking for a life quote?
We'll call you!
Types of disability insurance
The two main types of disability insurance are lump sum disability insurance and income protection or replacement plans.
Lump sum disability insurance
Lump sum disability insurance pays a lump sum to a life assured for a disability, such as R500 000 for a traumatic brain injury that causes a permanent disability. Lump sum disability insurance can be taken as a stand-alone policy or disability insurance can be added to your life insurance policy.
Lump sum disability insurance can cover either occupation or event-based disabilities.
If a disability insurance policy covers occupation-based disabilities it means the life assured can claim when they suffer a disability that results in them being unable to perform their chosen occupation. Occupation disability cover can cover own occupation or own or similar occupation or any occupation.
To explain this further, consider a surgeon. Their own occupation would be surgery only, an own or similar occupation could cover jobs in the medical profession such as lecturing to medical students and any occupation would be any job that could earn an income.
Event-based lump sum disability insurance that covers events pays an amount when a disability event happens, such as losing the sight in one eye or losing a limb.
Income protection plans
Income protection plans, also known as income replacement plans, are disability income insurance plans that pay a monthly amount such as 50% of the life assured’s salary for a temporary disability. Their intention is to replace lost earnings. For example, an income replacement plan pays 65% of your salary when you are not able to work for six months because of a serious illness like cancer. Disability income insurance plans are taken out as stand-alone policies.
Key factors to consider when comparing disability insurance and disability income insurance plans
You need to consider many factors when you compare disability insurance, including:
- Whether to take a lump sum plan or income protection plan or both
- The amount of cover and premium, which must be affordable
- The plan’s definitions of disability and types of disability it covers, such as what meets the insurance company’s definition of own or similar occupation
- Waiting periods, such as 15 days waiting period on an income protection plan
Disability insurance policies often have extensive terms and conditions because they need to cover many different scenarios and types of disability. It is therefore critically important to seek professional advice from a registered financial adviser or certified financial planner when comparing and selecting disability insurance policies.
1Life Insurance for all your life and disability insurance needs
1Life Insurance is a licensed life insurance provider offering a range of flexible life cover and disability policies that you can tailor to your needs and budget. You can take life and disability cover for a sum assured of up to R10 million at a competitive premium, and save up to 13% on premiums if you buy online. You can manage your policies on the online policyholder portal or WhatsApp service centre.
Claims can be submitted online and valid claims are assessed and paid quickly. 1Life Insurance was awarded the Life Insurance Category winner in the 2023/2024 Ask Afrika Icon Brands Benchmark survey. You can follow 1Life Insurance on Instagram, Facebook, X and Youtube.
Disability insurance protects you and your loved ones
Disability insurance premiums should be an essential expense in your budget, especially for young families who need support, love and care. Becoming disabled is a traumatic and expensive event. With cover in place, you can pay the bills and take care of your loved ones. Contact 1Life Insurance today for your life cover and disability insurance needs.