1. Income Protector
The right cover amount
The right cover amount
Your income not only determines your lifestyle, but also your future. The reality is that you may suffer an
unfortunate event that sees you becoming disabled. Income Protector is designed to ensure that you are
in the same financial position after disability or impairment as you were while working. Choosing the right
amount of cover ensures that your family’s lifestyle need not be affected by your inability to work.
How much is too much?
The intention of income protection products are not to place you in a better financial position when you
claim than while you were working. If a policy provides for excessive benefits relative to your income or if you
have multiple income protection policies from other providers, a disability could result in a total payment that
is higher than your income from employment. If insurance companies allowed this, it would actually create
an incentive for customers to claim which would mean much higher premiums for all other customers.
Therefore...
Liberty’s Income Protector benefits are restricted to a percentage of your after-tax insurable monthly
income. If you are over-insured, i.e. your cover amount from all income protection policies exceeds the
maximum amount that can be paid relative to your income under the Income Protector benefits, then you
will be paying for cover that you may not receive at claim stage.
This is similar to car insurance where you insure your car for a higher value than it is worth. You pay a higher premium but in the event
of loss, your insurance company will only pay out the real value of the loss to you. Once again, this is in the interests of keeping the
premiums that are charged to all customers as low as possible.
Review your cover amount
To avoid having your cover amount restricted at claim stage and paying for a benefit you don’t
need, it is essential that you review your cover amount frequently. Take the time to assess your
financial needs and goals with your financial adviser and let them guide you on the right level of
cover given your circumstances.
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Disclaimer
The information contained in this document does not constitute advice by Liberty. Any legal, technical, or product information contained in this document is subject to change from time to time. This document is a summary
of the features of the product as at the time of publication. If there are any discrepancies between this document and the contractual terms and conditions or, where applicable any fund rules, the latter will prevail. Any
recommendations made must take into consideration your specific needs and unique circumstances. All Risk products are underwritten by Liberty Group Ltd.
Liberty Group Ltd is an Authorised Financial Services Provider in terms of the FAIS Act (no 2409). ©Liberty Group Ltd 2015. All rights reserved.