Sickness and Accident Insurance: What Is It and Why Do You Need It

If there’s anything certain about life, it’s that the future is unpredictable. Be that as it may, we tend to disregard the thought that the worst can happen to us. Some call it optimism, others call it naïveté. You can call it whatever you want, but it still leaves you vulnerable in a world full of uncertainties.

Accidents, illnesses, and injuries happen. Luckily, most of them are usually short-lived, causing nothing but a minor inconvenience to your everyday routines. But others can be more serious and affect your ability to earn an income, putting your and your family’s livelihood at risk.

In the words of Steven Cyros, “Remember: when disaster strikes, the time to prepare has passed.” If you have a plan set for the unexpected, you have a better chance of minimising the negative impacts of a potential disaster, which in this case threatens one of your most important assets – your income.

What is Sick Pay Insurance?

Sick pay insurance

A type of insurance that provides financial support to individuals who are unable to work due to a sickness or injury. The policy typically provides a portion of your salary, (up to 80% of your income) for a set period of time, allowing you to pay your medical bills and maintain your standard of living until you get back on your feet.

When choosing a solution for your needs, you should consider several features such as the waiting period, benefit period, scope of cover etc. Selecting the right sick pay insurance can make a huge difference in your ability to weather unexpected events, so you should always seek professional advice.

Who Needs It and Why?

Whether you’re the primary breadwinner in your household, have high medical expenses, or have dependents that rely on your income, setting an accident and sickness cover is a wise decision. It’s safe to say that anyone who might find themselves vulnerable due to loss of income should have an illness insurance cover in place for peace of mind and financial security.

But then again, you’re young, fit and healthy; why on earth would you need accident and sickness cover? First of all, setting one while you’re younger is the advisable thing to do since the cost of these policies rises with age as your risk of developing chronic diseases increases.

And second, although it may be tempting to think that you’ll remain in prime condition forever, things tend to go sideways when you least expect them. For instance, you can find yourself in a bike or car accident that leaves you with a broken arm or leg, thus unable to carry out work.

Or maybe, you’ve pushed yourself a bit too hard, or overestimated your ability to work under pressure, and now you’re finding it difficult to cope with feelings of stress, anxiety and depression. Having an illness insurance cover set in place provides a financial safety net for you and your family in the event you’re unable to work due to a mental or physical condition.

My employer offers short-term insurance as part of my employee benefits package, do I still need personal accident and illness insurance? Well, in most cases, short-term insurance isn’t enough to cover all the expenses. In addition, it’s usually limited to a certain period of time, and it may not continue if you’re unable to return to work after said period has passed. Therefore, it’s advisable to consider purchasing a separate long-term insurance policy to ensure you have adequate coverage.

Additional Things to Consider

Knowing what exactly the sick pay insurance policy involves will help you make an informed decision. Since not all policies are created equal, you should thoroughly research your options to ensure it covers your needs. For instance, if there are high rates of heart attacks or cancer in your family, you should look for a suitable policy that covers those diseases.

However, you should know that some forms of cancer and CVD are often excluded from insurance policies because they’re easily treatable. Moreover, the cover may not be paid out if the illness is a result of a pre-existing condition or self-inflicted injury.

Other situations when the insurer won’t provide coverage may involve participation in illegal activities, acts of war or terrorism, abuse of drugs and alcohol, pregnancy, and childbirth. It’s worth mentioning that after you make a claim, and it is approved, your monthly payments will usually start 30, 60, or 90 days after you’re unable to work, depending on the waiting period of your policy.

Closing Thoughts

This is a critical, yet often overlooked form of insurance that can be a financial lifeline when things aren’t looking well due to serious illness or injury. This income stream can assist you with unexpected medical bills, rent and home loan repayments, and day-to-day living expenses, allowing you to overcome financial difficulties and focus on what matters the most – getting better.

Since you never know when you might need an insurance policy until you do, it’s time to weigh your options under the guidance of a professional broker and secure adequate coverage that fits your needs and budget.