MyMoney Online

It costs peanuts to insure your most valuable asset

What do you consider to be your most valuable asset? For almost all of us it’s our ability to earn an income.

Your house is not your biggest asset!

Consider a 25-year-old man earning R25 000 per month. Let’s assume his income grows along with inflation (six percent) and he retires at 65. He would’ve earned roughly R46-million!

Do you still think your house is your biggest asset?

How to insure your biggest asset by far

An income protection policy insures you against loss of income due to temporary or permanent disability or illness.

In other words, if you are unable to do your job due to injury or illness, the insurance company will pay your salary until you can return to work or, in the case of permanent disability, until you reach the retirement age (or even for the rest of your life).

How much does it cost?

Let’s assume that the man mentioned in the example above is a non-smoker earning R300 000 per year. He has an undergraduate qualification and works in an office.

The cost of insuring his income is about R130 per month.

The cost of insuring a woman of the same age and income could be slightly cheaper.

You might have income protection already

Many employers offer income protection under their company’s pension or provident fund. Make sure you understand the benefits and that you don’t have shortfalls.

Insurers differ in how they structure and price their products. Shop around, but stick to a reputable company and a financial advisor you can trust to offer honest advice.

Insuring your future income should form the foundation of your financial portfolio.

Also read the following articles by Claude Hannah:

- How much you should save for retirement

- Savers rejoice! South Africa gets tax-free savings accounts on 1 March 2015

- Why medical aid is woefully inadequate (and how affordable gap cover helps)

- Can’t (or won’t) buy to let? Don’t sweat; there’s a far more lucrative option

Claude Hannah is a financial planner for Venn-Sure Consulting. He completed a degree in Financial Risk Management from the University of Stellenbosch in 2006 as well as a post graduate diploma in Financial Planning. Claude helps to organise and simplify the often complicated and busy financial lives of his clients. He takes great pride in providing the highest level of service to help his clients build and protect their wealth. For more information, email him (claude.hannah@liblink.co.za) to arrange for a free consultation.


This article first appeared on 702 : It costs peanuts to insure your most valuable asset


CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
What you must learn from the Steinhoff and EOH share price collapses

What you must learn from the Steinhoff and EOH share price collapses

The Money Show’s Bruce Whitfield interviews Galileo Capital Personal Financial Advisor Warren Ingram.

3 JSE shares you should consider buying right now (by JM Busha Investment Group)

3 JSE shares you should consider buying right now (by JM Busha Investment Group)

The Money Show’s Bruce Whitfield interviews JM Busha Investment Group Managing Director Joseph Busha.

Can’t (or won’t) buy to let? Don’t sweat; there’s a far more lucrative option

Can’t (or won’t) buy to let? Don’t sweat; there’s a far more lucrative option

Financial planner Claude Hannah compares the costs, risks and returns of property unit trusts to that of buy-to-let properties.

Why medical aid is woefully inadequate (and how affordable gap cover helps)

Why medical aid is woefully inadequate (and how affordable gap cover helps)

It may come as a shock (but it’s all there in the small print); medical schemes do not fully cover you when you’re hospitalised.

Savers rejoice! South Africa gets tax-free savings accounts on 1 March 2015

Savers rejoice! South Africa gets tax-free savings accounts on 1 March 2015

Savers rejoice! On 1 March 2015 government introduces tax free savings accounts. Financial planner Claude Hannah explains…

How much you should save for retirement

How much you should save for retirement

You know you should save for retirement, but do you know how much? Financial planner Claude Hannah breaks it down in simple terms.

Popular articles
Van Damme: De Lille has until Monday to respond to maladministration claims

Van Damme: De Lille has until Monday to respond to maladministration claims

The DA has suspended Patricia de Lille from party activities but Eusebius McKaiser says its statement 'is clear as mud'.

LISTEN: Father of drowned toddler speaks of dangers and heartbreak

LISTEN: Father of drowned toddler speaks of dangers and heartbreak

Connor Weber, fell unnoticed into a bin of water and drowned.

Fund manager lays criminal charges against former Steinhoff CEO Markus Jooste

Fund manager lays criminal charges against former Steinhoff CEO Markus Jooste

The Money Show’s Bruce Whitfield interviews Benguela Global Fund Managers Chief Investment Officer Zwelakhe Mnguni.

The Steinhoff Story: from humble beginnings to billions

The Steinhoff Story: from humble beginnings to billions

Financial Mail editor Rob Rose chats to Eusebius McKaiser about how Steinhoff became the retail giant we know, before the fall.

Zuma order to pay costs of failed legal suit, a damning indictment: Law expert

Zuma order to pay costs of failed legal suit, a damning indictment: Law expert

Law professor at Wits says the President has now been warned to consider his options very careful when playing delaying tactics.

Predictably awesome new Nando's ad reminds South Africans ‘we can fix our sh$t’

Predictably awesome new Nando's ad reminds South Africans ‘we can fix our sh$t’

Watch the Guptas pack their bags and run in Nando's inspiring new advertisement.

How businessman Max Lichaba struck gold with his jewellery company

How businessman Max Lichaba struck gold with his jewellery company

Entrepreneur Max Lichaba built his own empire and is the CEO of Lichaba Creations and several other businesses. This is his story.