Consider taking out disability insurance
Changes to the RAF mean that you could end up receiving nothing should you still be able to work despite being disabled
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South Africans are being urged to consider taking out permanent disability
cover under a personal accident insurance policy, after the laws relating to the
Road Accident Funds (RAF) were changed this year.
The new RAF laws state that benefits are only paid out should a person be
unable to return to his or her occupation, or any other occupation for that
matter for which he or she was trained.
The Product Manager at Alexander Forbes Insurance Group, David Honeyman, said
that many South Africans would need to rethink their employee benefits schemes
because of these changes. "Many companies and individuals will find that they do
not have sufficient disability cover under their employee benefit disability
schemes," he said.
Honeyman gave the example of a person involved in a car accident
that left him paralyzed and in a wheelchair. He said that in most cases,
administrative worker policyholders would not receive a payout from their
retirement fund disability policy, simply because they could, theoretically,
still do their job from a wheelchair.
He also said that the costs of modifying a home and making it
wheelchair accessible were exorbitant - and were not covered either.
Honeyman also said that the cost of looking after a child crippled
in a car accident is a life long commitment and comes at an enormous expense to
the family.
"Usually one of the parents has to stop working to look after the
child," said Honeyman, "or hire medical attendants 24 hours a day. None of this
is cheap."
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