The myths around disabilities

The Association for Savings and Investment South Africa (ASISA) reports South Africa’s current disability insurance gap sits at R19.3-trillion. For those aged 30 to 39 (about nine million earners), there’s an insurance gap value of R1.5-million per earner. While disability risk increases with age, a 25-year-old still has an 86% risk of a temporary disability, with an 8% chance of becoming permanently disabled. In fact, 92% of people aged 25 to 32 are likely to experience a temporary disability rendering them unable to work for 14 days or more.

Nonkululeko Zungu, Product Support Consultant for Sanlam Individual Life, says, “Often people mistakenly associate disabilities with one-in-a-million freak accidents. However, it is frequently, depression, diabetes, heart disease, spinal injuries, back and joint disorders, arthritis and bone fractures that incapacitates people. Depression is one of the biggest ‘unseen’ disabilities globally. The World Health Organisation (WHO) predicts that this year, it’ll become the second most common cause of disability in the world.”

Myths around disabilities

Changing one’s mindset from ‘it won’t happen to me’ to ‘it probably won’t happen to me, but I need to prepare for every eventuality’ is a big shift – especially when you’re in your 20s! Disabilities come with innumerable myths and misunderstandings. The first step is to understand that disabilities can happen to anyone. The next step is to unpack the different types of cover and which ones work best for each person’s specific circumstances.

Myth 1: Zungu says that one of the big misconceptions is that all employers offer disability cover, “Many employers do choose to provide risk cover – e.g. life, funeral and disability cover – for their employees, but this is not standard practice. It’s more common for bigger businesses than small ones. It is vital to never just assume but to always ask whether an employer offers cover and how to access this. Remember, group plans may also come with limited cover that isn’t personalised to your profile. Plus, any cover could immediately fall away should you leave your employer.”

Myth 2: Another layer of security people lean on is the idea of workmen’s compensation. In South Africa, ‘all employers; and casual and full-time workers, who as a result of a workplace accident or work-related disease are injured, disabled, or killed; or become ill’ are entitled to compensation according to the Compensation for Occupational Injuries and Diseases Act. But, only in specific circumstances. To be covered by worker’s compensation, the causes of the disability must be work-related – which is frequently not the case. Think of cancer, heart attacks, diabetes, back pain and arthritis, which cause most long-term disabilities.

Myth 3: Will your savings really stretch? The average duration of a long-term disability is 31.2 months – but it can be for a lifetime. Most people’s savings won’t stretch to cover their monthly expenses for this long. The long and the short of it is that South Africans need to better protect themselves against disability risks.

Here, Zungu outlines five questions to ask before investing in disability cover:

1. What will I be covered for? You have to know what types of disabilities are covered under your policy. It is important that the benefit provides cover for occupational disability – in a nutshell, this means you can claim if a disability renders you unable to do your job. Most benefits also provide a pay-out for certain injuries and illnesses. Where this is the case, it will be disclosed in the policy documents. Ask your intermediary about these.
2. What will I not be covered for? Ensure you’re aware of any exclusions on the benefit – circumstances under which you will not be able to claim. These can be generic to the benefit or specific to you and your lifestyle or medical history.
3. How much cover do I need and how long will I need it for?
   – Your intermediary will help you to determine the amount of cover you need, based on a range of factors like your income and age.
   – Your cover should keep up with the cost of living or inflation. So, ask how the amount of cover will change over time.
   – Ideally, you want occupational disability cover to continue until you decide to retire.
   – Some benefits allow cover for certain injuries and illnesses to continue post retirement.
4. How much does it cost?
   – Ask the intermediary about the starting premium and how it may change in the future, so you can get an idea of whether you will continue to afford the cover over time.
   – If you receive certain discounts from the insurer, ask whether these will continue to apply if your lifestyle changes. Will premiums increase? If so, by how much?
5. Do I need to let the insurer know if my occupation, circumstances or lifestyle changes?
   If so, how will this impact my cover and premium?