This article is the fifth in a series of six that explore common mistakes that can negatively impact on one’s personal financial situation.


One of the common misperceptions among professionals about insurance cover is that a comprehensive medical scheme will be enough to meet their needs should they fall ill or become disabled and are unable to perform their profession. However, while medical aid should be sufficient to meet their immediate healthcare needs, it may not be enough to pay for all financial commitments, particularly for self-employed professionals.

Income replacement and income disability policies are hugely important as the benefits pay a monthly income when the claimant is not able to work, either temporarily or permanently, up to a defined age. It also ensures the continuation of an income stream at a time when one may need to concentrate on his or her recuperation.

Income protection benefits are incredibly important for the self-employed professional, as any time taken off work due to ill-health or incapacity will have a direct bearing on their ability to earn an income. Professionals who have their own company do not just need to cover their own salary but also the salaries of their staff, as well as the expenses of running their business.It is also important to remember that a salary will not be paid immediately, as income protection schemes typically include waiting periods. Most income protection schemes tend to operate with a three-month waiting period. However, a shorter waiting period – for example seven days – may be ideal for professionals.

One of the latest trends in the field of income protection benefits is the incorporation of incentives that enable the claimant to go back to work, even after a successful claim. Through this development, the claimant can attempt to re-enter the workforce with the comfort of having the benefits in place, giving him or her the  peace of mind that if the attempt is unsuccessful, the benefits continue.

It is important to take the time to speak to a financial adviser about the type of income protection benefit that may be most suitable for your needs and to ensure you are adequately covered for any unfortunate event that may leave you unable to work.

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