In the last two weeks we have talked about critical illness and disability cover, and why they’re important in your risk portofolio. This week, we’re discussing a risk that seems more real for most people: retrenchment.

In today’s tough times, more than a quarter of our country is unemployed. Retrenchment has become a real phenomenon for many people and many more anxiously wait to see if and when their number will be called. With existing jobs sometimes vanishing overnight, and new work harder than ever to find, what are we to do when we’re out of a job?

Well, what if that weren’t a problem?

There are policies designed to protect against accidents or injuries that hinder us from working (disability cover), risk cover to look after our loved ones when we pass (life cover) or a serious disease throws us for a loop (critical illness cover). But what if we’re healthy and fine, yet we lose our job because our company is downsizing?

In South Africa, retrenchment insurance is gaining ground with the top life insurers offering it currently, and more and more stepping up to fill the need. There’s a demand for this risk cover and it’s one of the few types of insurance that young people readily accept they need.

What are the benefits of retrenchment cover?

1. Get the right job at the right salary, not just the first one available
Few things inspire panic like knowing that there will be no money coming in at the end of the month. So, a lot of retrenched people rush out into the job market in desperation and take the first thing that’s offered to them – often at a lower salary than they are worth. But what if you could wait for a job that made you happy, you are passionate about, and paid decent money? Insurance means you can have that chance.

2. Eliminate the stress and improve the performance
Research has proven that stress makes you perform worse at work, and that someone who fears they will get fired will, ironically, be more prone to making errors that might put their job at risk. But the law protects people against unfair dismissal and, with retrenchment cover, you don’t have to worry about those ‘cutting staff’ rumours.
Important note: retrenchment cover does not help you if you are fired, only retrenched as a full-time employee.

3. Save your savings
If you are saving for a home, a holiday or retirement… guess what is at risk if you are retrenched? Preserve the savings you have with cover so that, if you lose your job, you can still go to Paris or buy that home.

4. Save your quality of life
There are a lot of things that can be put in serious jeopardy by three months in between jobs; your ability to pay rent in a place or area you love, your gym membership which keeps your stress manageable, and the ability to keep up with your utility and services bills.

So, do you really need Income Protection? Well… if you want the security to thrive, then we believe you do.