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VIEWPOINT: EMPLOYED INDIVIDUALS Your unique insurance risks

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In the modern world, where many professionals have the option of being employed or to opt for self-employment, each individual in either of these employment categories has unique requirements to address their vastly different insurance needs. Just as there are contrasts between the desires and goals of individuals who are self-employed and those who are employed, the same goes for their insurance needs.

This article is the first in a two-part series which will explore the different insurance needs of employed versus self-employed professionals, with the first focus being on employed individuals.

INSURANCE NEEDS UNIQUE TO EMPLOYED PEOPLE

Although most professionals who work for a company normally benefit from some sort of company group benefits scheme to cater for their retirement, life and disability or medical risk needs, these benefits are not based on the individual’s personal circumstances. It is therefore important that the employee also considers individual insurance to cover any gaps that might be present in the basic group benefit.

This is especially relevant in terms of the amount of life and disability cover, where it is crucial to understand the amount of cover, the definition of a disability, how comprehensive the cover is, and whether it covers their unique lifestyle which might include a hazardous sport. The biggest mistake any consumer can make is to assume that the cover or savings they have in place will be sufficient in an unforeseen event such as a death, temporary or permanent disability.

As an employed professional some key questions to ask your financial planner include:

  • Do I need additional cover to supplement my group benefits or should I opt for full cover under an individual policy to address risks not covered by the group benefits? How much of my income is covered under the group benefits and how does the definition of disability under the group benefits work?
  • Do I need more life cover than what is offered by the group benefits to ensure my estate and dependants will be properly and effectively looked after?

Author: Tiffany Boesch CA(SA) is group financial director of PPS