Possible insurance risks you may face in your life

25 AUGUST 2023

Life happens. The best we can do is be prepared for the risks that come with it. Insurance allows us to be prepared for particular events and moments in life. Learn about the types of insurance you might need during your lifeWoman with documents in hand, using laptopInsurance protects us against financial risks when life happens. We can’t prevent unprecedented events, but we can make sure that no matter what happens, our finances and ability to provide aren’t severely affected. There are risks associated at different stages of our lives. Each insurance type will be expanded below.

Types of Insurance:

Loan insurance

This is probably the first type of insurance you would take out. Loan insurance is most often included in taking a loan out, for example, your student loan or personal loan. Loan insurance covers debt repayments on certain loans if you’re unable to pay due to an event that is covered. These could be disability, illness, or unemployment. How much you are covered depends on your credit history and the amount of debt in your name.

Auto Insurance

Buying your first car is an important life event. Having car insurance is a must-have to protect yourself from the financial damages that could come with an accident. Liability coverage, if you were responsible for the car accident, covers the cost of any injuries or property damage. Collision coverage covers the costs to fix or replace your car after it’s damaged. Comprehensive coverage covers other losses such as theft, vandalism, flood, fire, or hail. Make sure that you speak with your insurer to determine what type of cover you can have and the level of protection it offers.

Health Insurance

Getting health insurance would be the next big insurance you would take out in your life after you’ve been getting a regular income from a job. The risk with not having health insurance is not only your money but your health as well. It covers the cost of medical expenses and bills, that you pay towards with monthly premiums. There are different levels of health insurance depending on what cover you need, and how much you’re able to pay monthly.

Long-Term Disability Insurance

Once you suffer an injury, you could be unable to provide an income if you’re put off work. Long-term disability insurance protects you from this loss of income when you can’t work for a long period due to a disability from illness or injury. Disability insurance policies make clear what is covered, in terms of what counts as a disability and what percentage of your salary is paid out. For long-term disability insurance, it’s most often between 40% and 60% of your base salary.

Home Insurance

Once you own your own home, you will need homeowners insurance. This insurance protects your income so that you don’t need to pay from your own money to replace or fix damages. Home insurance covers against the risks of liability like injury on your property if someone falls or if your dog bites them, for example. This coverage pays for damages if the injured person sues you and is awarded. Property coverage protects you against the risks of damage to your home or possessions in it. Examples of these risks are hail, flood, and robbery. Your insurance pays out to replace or to repair damages for example from your geyser bursting.

Additional risks you could face in life and insurance you may need

As we progress through life, certain risks could also become a factor in how we protect our livelihood. Insurances that protect us in these instances are:

  • Personal Accident Plan - Covers against the risk of hospitalisation, becoming disabled, or death. Pays out directly as a lump-sum to you or your dependents, unlike health insurance or medical aid.
  • Critical Illness Cover - Protects against the risk of contracting a critical illness covered by the benefit, and pays out a lump sum to cover lifestyle changes.
  • Funeral Plan - Protects your family against the costs that come with planning a funeral, which can be a financial burden on your loved ones.
  • Customer Protection Insurance - Covers the risk of not being able to pay balances on loans, store cards, and credit cards due to death, disability, and loss of Income.
  • Travel Insurance - Protects you from the financial risks and losses that can happen when traveling, for example, delayed luggage or flight cancellation.
  • Pet Insurance - Covers the costs of medical treatments, emergency care, rehab, etc for your pets.

Risk Management Basics

When navigating the risks in your life, keep in mind that you are protecting your future against possible scenarios and events. It’s important to keep your finances healthy so that you’ll be able to afford the premiums needed to have insurance. Along with this, a healthy mind and body can significantly lower the risk of illness, injury, and accidents. Before you take out insurance, plan and compare quotes with insurers to find the best solution for you. Use our guides on insurance to educate and apply yourself to protecting your future.

RCS provides fundamental cover that will bring you peace of mind, making sure your key criticals, such as percentage of pay for a lump sum and what you are covered for, are clearly stated. Having the right insurance plan for YOU will make the journey through life simpler and easier.