Michelle Bester Why income protection 24Oct2023

Why Income Protection?

By Michelle Bester (CFP®)


Protecting your income is crucial, especially in uncertain times. Your ability to earn an income is probably your most valuable asset. It helps you to provide for yourself and your loved ones, achieve your goals, and plan for your future. Income protection is a type of insurance that pays you a monthly benefit if you are unable to work due to illness, injury, or disability. It helps you to cover your living expenses, maintain your lifestyle, and avoid debt. Income protection can also aid your recovery and rehabilitation process, as well as your return to work.


Here are some reasons why you should consider income protection:

  1. Illness and disability can happen to anyone unexpectedly, regardless of age, occupation, or health status. The permanent loss of income due to illness or injury is the single biggest financial risk young people face during their working lives. According to the South African Human Resource Commission, people with disabilities account for 5.1% of the population in South Africa.

  2. Economic uncertainty and the impact of COVID have made it harder for many people to meet their monthly financial obligations. Research by Catalyst shows that 41% of respondents reviewed their finances and insurance cover in 2020, highlighting the financial uncertainty felt by so many.

  3. Income protection is flexible and can be adjusted to suit your needs and circumstances. You can choose between accident and sickness coverage or accident-only coverage, depending on your risk profile and budget. You can also select the amount of benefit, the waiting period, and the benefit period that best suit your situation.

  4. Income protection is different from other Risk insurance. Life insurance pays out a lump sum to your beneficiaries at death. Critical illness cover pays out a lump sum if you are diagnosed with a specific illness or condition. Medical aid covers some or all of your medical expenses when you need treatment. Income protection, on the other hand, replaces a portion of your income (normally 75% of gross income which should equate to your after-tax income) when you are unable to work for any reason.

  5. Income protection is not only for people who have high-risk jobs or health conditions. Anyone who relies on their income to pay their bills and support their family should consider income protection.

You should compare different Income Protection options and find the one that suits your needs and budget. The best way to do this is to consult a Certified Financial Planner (CFP®) for professional advice and guidance.

If you want to learn more about income protection and how it can benefit you, please contact Ascor® for a Comprehensive Disability & Income Protection Analysis.


Read more about Ascor® Financial Planning Services

Ascor® Independent Wealth Managers Financial Planning Services page


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