An accident, illness or temporary disability at some time during your working life is a very real possibility. Can you think of someone who has been off due to recovery from a car crash; a sporting injury; a temporary but serious illness; a mental health problem; occupational overuse syndrome – any of these issues could require months off work.
Sick pay generally only covers a few days absence every year, so if you or a family member or friend were not able to work, what would you fall back on? Do you have a Plan B??
Ask yourself:
- If you were unable to work because of illness or an accident, how would you cover debt repayments (mortgage, credit card, personal loans)?
- How would you pay regular household expenses?
If you are saying to yourself well ACC will pay me then you need to know that ACC only covers you for an accident, if your claim is accepted. If you have an illness you might qualify for a Job Seeker Support from WINZ (formerly Sickness Benefit.
Currently (August 2014) if you are single and 25+ this is around $110 a week and if you are married $174 a week (however offsets may apply).
Both of these options give you no certainty around how you would survive financially.
Isn’t it funny that when we buy a car, the first thing we do is rush out and insurance it. Have you done that?
When we buy a house, the first thing we do is get it insured.
But we need to realise that our income is Pivotal to our life and lifestyle.
Without income we wouldn’t have that house or car would we.
And just as important is our health. Because without our health we would be able to generate that income.
Example
Dave is 58 and he was rushed to hospital with severe chest pains. (Remember, a heart attack and cancer are a male’s biggest risk.) For us girls, statistics tell us cancer is our biggest risk.
He had an angioplasty (which is a procedure to clear blocked arteries) but continued to have ongoing pain despite his treatment. Normally Dave could have expected to be back at work within weeks following his surgery, but his recovery was not as quick as he’d hoped.
Ten months following his first hospitalisation, he was still unwell and unlikely to be able to return to his construction job in the near future. While all this was going on, Dave’s income protection insurance helped to cover mortgage payments and living expenses for his family.