Hand holding umbrella protecting bag of money. Financial safety, income protection insurance concept.
Hollard Life Solutions has reinstated its seven-day income protection waiting period and introduced a new 14-day option, responding to strong demand from financial advisors and shifts in the labour market. The seven-day benefit pays retrospectively from day one, while the 14- and 30-day options begin paying from day 15 and day 31, respectively.
Steve Piper, Head of Underwritten Intermediary Sales at Hollard Life Solutions, said Income Protection remains underrepresented in the South African insurance market.
Piper explains that Income Protection is often overlooked in favour of lump-sum Disability benefits, which only pay out in cases of permanent disability. “Yet, despite its importance, Income Protection accounts for only 6% to 8% of life insurance policies in the market.”
“This trend is concerning, as Income Protection is the one benefit that provides ongoing support when someone is temporarily unable to work, whether due to illness or injury. Income Protection ensures financial continuity,” said Piper.
“Income Protection is designed with the realities of today’s workforce in mind, especially younger professionals, entrepreneurs, consultants, contractors and freelancers. Younger people are often freelancing, working gig jobs, or running small businesses. They may not have home loans or children yet, so traditional life cover is not a priority, but they still need to protect their income,” said Piper.
Piper explains that Income Protection differs from traditional lump-sum disability benefits, which cover only permanent incapacity. Income Protection pays out for shorter-term events that may render a person temporarily unable to work, such as illness or injury.
According to Elmarie Samuel, the Sales Enablement Manager at Hollard, the new seven-day waiting period is especially suited to self-employed individuals, commission earners and contract workers, groups that don’t have access to paid sick leave or UIF. “Many people don’t have the financial reserves to absorb even a few weeks without income,” says Samuel. “Shorter waiting periods are a practical solution to cover that gap.”
Samuel says people often underestimate the financial value of their income. “If you calculate the potential income protection claim payments possible whilst in claim over what may be extended periods of incapacity, with 5% annual increases, the benefit creates substantial financial support. Most lump sum disability policies can’t replace that level of lost income.”
She highlighted that, “The vast majority of claim events last under three months, but most people don’t have enough savings to cover even that short a gap in income. That’s where Income Protection becomes vital.”
The Income Protection product includes a two-part structure: an initial limited disability income benefit that pays for up to two years and an extended benefit that continues to pay until retirement if the policyholder remains unable to work. However, Hollard noted that long-term claims are rare, with most claims lasting less than three months.
Samuel added that income protection is generally more affordable than lump sum disability cover when comparing equivalent payouts and it offers broader coverage.
The cover is available as a standalone product or alongside other life insurance benefits.
“We’ve simplified income protection, removed unnecessary rules and made sure it works for people who need fast, reliable support when they can’t earn. It’s really for those unsure events in life,” said Samuel.
Premiums are adjusted according to occupational risk. While high-risk occupations such as hairdressers, entertainers and nail technicians have historically been excluded, Hollard said it has made the product and underwriting adjustments to extend basic cover to more of these types of riskier professions.
According to Hollard, advisers who continue to play a crucial role in the policyholder’s journey are encouraged to discuss these options with clients who already hold life policies, particularly those with lump-sum disability benefits but no Income Protection.
“We have a responsibility to create impact at the core and Income Protection is a big part of that, as it has the potential to mitigate short-term financial shocks or unsures,” said Samuel.
SUPPLIED.
