By Francis Aldrich CFP®, PPS Technical Marketing Specialist
WHY IS PROTECTING YOUR INCOME KEY?
Let’s put an important peg in the ground: Your income is your greatest asset. It is the key source you fund your lifestyle with, which may include any of the following:
Most of us are not able to survive without an income, and will be in a dire situation should we become disabled. Luckily income protection benefits are there to ensure that you can continue living the lifestyle you want, should you become disabled. So as a point of departure, it is critical to consider income protection benefits as the first item in your financial plan.
HOW MUCH COVER DO YOU NEED?
The short answer to this question is to ensure that you have enough cover to continue funding your current lifestyle. But let’s unpack what that means as it is often not just a matter of putting your monthly salary back in your pocket. Professionals often earn income from multiple sources, in diverse ways.
Take a successful professional working in a corporate environment as an example: these company packages often include performance-related bonuses, and they often form a substantial part of such individual’s income. It might not be used to fund monthly expenses, but it certainly plays an important role when it comes to hobbies, holidays, loan repayments or savings. As such, if one neglects to cover these bonuses, you neglect to cover part of what helps you to live the lifestyle you want.
Furthermore, some professionals earn income from multiple sources. For example, a professional might use their professional knowledge and skills to run their own business (where they earn an income), as well as act as an independent trustee or board member of a different organization or association, which remunerates them for their services. Again, this means that the income from his or her own business is not the only source of lifestyle funding, and these additional sources also need to be considered.
Also, professionals who run a business (for example a doctor with a practice) are not only required to look after their personal financial affairs, to a considerable extent they are also required to ensure the continued running of their business, which includes funding business expenses. In this case, if you ignore the business expenses you neglect to ensure the continued running of your business, which ultimately provides you with your income.
THE PPS SOLUTION
At PPS we offer the unique Sickness and Permanent Incapacity benefits to cover all the above, with even more optional benefits to tailor the benefit to your unique circumstances:
- Get paid while in hospital,
- Cover your spouse and children if they are in hospital, or
- Get 100% guaranteed payment if you become permanently incapacitated.
And you get more than just insurance: You also get to share in PPS’ profits, through the PPS Profit-Share Account.
PPS is an authorized FSP.