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How would you manage if you lost an arm tomorrow?

When you are young and healthy the risk of death, disability or even severe illness may seem distant while you weigh up your whole life ahead of you. Yet in 2014, almost 10% of Liberty’s claims were paid to policyholders younger than 35.

As a young adult you also have to consider the fact that your biggest asset is your ability to earn a future income. The value of a person’s future earnings is greatest at the start of their career. It is at this foundational stage that a severe or permanent disability will have the greatest impact on your financial future. To protect yourself and your young family it is essential to have the appropriate insurance in place.

Spread of claims across cover type by gender
Of all claims submitted by men and women under the age of 35, the majority (43% and 53% respectively) were for Loss of Income Protection. These benefits provide an income while you are unable to work due to illness, disability or retrenchment. It is however important to note that even at these relatively young ages, the risk of death and critical illness are also prevalent.

How would you manage if you lost an arm tomorrow

Life Protection: Motor vehicle accidents
Motor vehicle accidents account for more than half of the Life Protection claims for men. In fact, over 60% of all claims (including Life Protection, Loss of Income Protection, Lifestyle Protection and Policy Protection) by clients under 35 were as result of unnatural causes – this figure is considerably higher than for other age groups.

Loss of Income Protection: Retrenchment
We have seen a steady increase in retrenchment claims as the South African economy struggles to regain momentum. Retrenchments are the main cause of Loss of Income Protection claims for both men and women under 35 (making up 28% and 36% of Loss of Income Protection claims respectively).

Lifestyle Protection: Cancer
Cancer accounted for the majority of critical illness claims for clients under the age of 35 (39% of female claims and 18% for men). For men specifically, cardiovascular disorders however resulted in more critical illness claims than cancer. Both of these diseases can be accelerated by stress and fast paced lifestyles.

You might think that being a young adult doesn’t present the kinds of risks that older lives might experience – but suffering such an event at this age will have a far more significant impact on your life. With growing financial pressures and increased health and lifestyle risks, the young adult has to consider their finances just as much as the average 45 year old, if not more.