Understanding the need for disability cover
What income would you fall back on if you were to lose your ability to work due to health reasonseven temporarily? Disability cover acts as a safety net should you be unable to earn an income due to a physical disability or illness. It protects your greatest asset: the ability to earn over an extended period. According to reputable research it is estimated that one in four twenty-year-old’s will experience a disability during their working years. This article aims to highlight the core differences between income disability and lumpsum disability cover.

Income Disability Cover
Income disability refers to the monthly income that would be compensated to you by your insurer in the event that you become disabled or are too ill and are unable to perform your duties at work and are therefore unable to receive your regular income from employment. This benefit is payable even if the illness or disablement is only temporary, and you are expected to return to work in due course.
It is imperative to differentiate between impairment and disability. Impairment implies a physical or functional disorder but does not necessarily stop you from being able to earn an income. Your ability to earn may be impaired, but not entirely stopped. Examples of impairment may be the loss of a limb or the loss of eyesight. Disability, on the other hand, implies an inability to earn an income on a permanent basis.

Benefits of Income Disability Cover
Income Disability cover ensures that you will continue to have an income even if you are unable to work due to illness or injury. It provides regular payments that replaces a percentage of your income if you are unable to work due to an illness or an accident and pays out until you can start working again- or until you retire (some policies may even pay you beyond retirement). The basis of income disability is built on ensuring you can maintain your standard of living if you are deprived from earning an income.

Lump sum Disability
Lump sum disability cover is normally paid as a once-off or fixed amount in the event of total and permanent disablement. Lump sum disability can be claimed if the individual insured is no longer able to practice their occupation. If income protection cover is not available to you for whatever reason, lump sum disability cover be used to provide an income, although this comes with inherent investment, longevity and inflationary risks. Having said that, your financial advisor will be able to assist you with calculating the correct quantum of cover.

Benefits of Lump sum cover
The role of lump sum disability cover is to pay off debt such as mortgages, credit cards, etc. It is used to make provision for capital expenditure for expenses related to the disability, such as making adjustments to your home, lifestyle adjustments and vehicle modifications that need to be made.

Morebo and Disability Cover
Morebo provides an integrated, customised solution looking at risk management and disability management. Our managed solutions look at each individual to make sure that their requirements are understood, identified and met in the best way possible. Our definition of disability is fixed. The benefit is targeted at members who become permanently or temporarily disabled and need a secure monthly income stream, in other words an income replacement.