With women’s month just around the corner, there really is no better time to reflect on the many women who give their all to provide financial stability for their families. The latest General Household report by Stats SA shows that 42,1% of South African households are headed by women, and that approximately 7,5 million South African women are either the sole or the main income earners in their families. Protecting their ability to bring in an income should therefore be a top priority.
This is according to Jenny Ingram, Head of Product Development at Momentum Life Insurance, who says that single-parent households and female-led households are only increasing. “Income certainty for these women also determines the future of their families. The pandemic of the last few years has also been particularly hard on female breadwinners. Indeed, the latest Momentum | UNISA Household Financial Wellness Insights revealed that just over a million women (who make up 51,1% of the South African population) either lost their jobs or were prevented from working.”
With this in mind, Ingram notes that disability cover and income protection are possibly two of the most important financial products that any female breadwinner should have in place. “An unexpected and life-changing disability or illness can have a considerable impact on you and your family. You may be left without an income if you are unable to work or your quality of life could be affected if you are forced to move to a less strenuous (lower-paying) job. Even if the disability or injury is only temporary, the financial effect of not being able to earn an income for any period of time can be crippling. That isn’t even taking into account the cost of treating an injury or serious condition. Disability cover and income protection should therefore be a top priority.”
She adds that the right level of life cover is also vital. “Momentum Life’s most recent claim stats have shown that women currently make up around 71% of death claims. For South African women, particularly those who lead single-parent households or who are the main breadwinner, making sure your loved ones are taken care of if you pass away unexpectedly, is so incredibly important.”
With this in mind, Ingram has some important pointers for people who want to start insuring their most valuable asset – themselves:
1. Get targeted advice
As with most financial products, there is no one-size-fits-all approach to disability, life and income cover. It is best to seek advice from a financial adviser. There are many options available and the right advice can help you to narrow it down to what you need at a price that you can afford.
2. Comprehensiveness is vital
There are many risks and variables to keep in mind when you decide on the right cover for you. The key is to cast as wide a net as possible. Don’t only look at merely replacing your salary with an income protection product or getting a single disability product payout. Look at all of the claim categories that would apply to your situation such as functional impairment, critical illness, hospitalisation and fractures. Investing in holistic disability cover, underpinned by functional impairment, can provide much more certainty.
3. Consider your biggest risks
Resources like Momentum Life’s annual claims reports can give you a much clearer picture of which disability risks are most prevalent and how one can manage those risks. Around 40% of disability and impairment claims are currently made by women, with cancer being the most prevalent cause for claims. In total, the three top reasons for disability claims were cancer (34%), musculoskeletal (22%), and nervous system (17%) conditions.
Ingram points out that most people plan their future based on the assumption that they will continue to earn an income until they retire. “However, many don’t into account the risk they face of losing their ability to do so. Critical illness, disability or premature death can all leave a family in financial ruin. Holistic insurance benefits keep female income-earners on their journey to success and protect their family’s financial security,” she says.
Such holistic insurance can also include insuring your investments. Certain investment products have the added feature that the investment house will start paying your contributions on your behalf when something happens to you. This means your child’s education savings will stay intact, and if you are the breadwinner, your spouse’s retirement savings. For instance, the Contribution Replacer feature on Momentum Investo solutions pays your contributions if you become disabled or when you die. In this way you can protect your savings goals on both your retirement annuities and endowments.