Insurance extends well beyond the vehicle sector. At whatever level one is operating, if one has assets and one risks losing them, they need protection. Your biggest asset is not your house or your retirement savings but your future earnings. As without that you wouldn’t be able to require a home or afford to pay towards your retirement.
And Income protection policies are expensive because they providing for your future living expenses, because it pays out a monthly (possibly escalating) income for the rest of your working. Also through your request for the annual escalation for an income protection benefit. This ensures that the benefit keeps pace with inflation each year until you may need to claim.
At times in life you may be forced to stop working due to an unfortunate incident as a disability. If you’re relatively young, you may think that you don’t need this kind of protection, because the chances of your becoming disabled are low. Although this may be so, you should not forget that anyone at any age can become a victim of an accident or crime.
This can lead to the risks of not having an income in future, only six percent of South Africans have insurance against loss of earnings and that at a younger age you have many more years of your working life ahead of you, and more earnings to lose, than a person who is closer to retirement.
Income protection policies provide you with an income typically to age 60, 65 or 70 and the life assurance company takes the risk of paying you an income for the period for which you will require it.