By Karen Bongers, 22 April 2020
Hopefully, for most of us, any current impact on our ability to earn an income is temporary. While the majority of COVID-19-related loss of income to date has been because of business interruption, it does put the focus on the importance of
preparing for loss of income due to illness or injury – even more so if such a loss is permanent.
Loss of income can be devastating when you’re in your prime working years as you have so many more years of earning potential ahead of you. However, many twenty-somethings may have an ‘it won’t happen to me’ mindset, which means they don’t make provision for the unthinkable.
Karen Bongers, Product Development Actuary at Sanlam Individual Life, advises laying a solid financial foundation to protect your earning ability from the very first paycheque, “Protecting your income to mitigate risk such as the long-term inability to earn an income, is critical.
Disability cover protects you against the inability to earn an income as a result of illness or injury, and against the costs of living with a disability even if you can still work.”
Bongers covers some things to consider in order to prioritise your finances to also protect your ability to earn an income:
death cover and
funeral cover are some of the most frequently purchased types of insurance, Bongers says disability cover should also be a priority. Arguably even more so, as in the case of disability cover, the disabled person also needs to be provided for. She adds, “Sanlam has revamped its disability product range to be the most comprehensive in the market and to speak to the requirements of the modern-day client.
Your financial planner will play an important role in providing you with
holistic financial advice to ensure that you’re prepared for the unthinkable. “Partnering with a financial planner can help you to plan for the things you can control and those you can’t.”