When it comes to assessing the risks that a life insurance policy covers, we tend to think of them as once-off events. For traditional life insurance benefits, this thinking is appropriate: death and disability benefits can only pay out once, and most critical illness claims are the only claim on that policy.  

However, temporary disabilities behave very differently. Income protection benefits pay out for periods of temporary inability to work due to an injury or illness, and many of us will experience many such periods during our careers. That means that a policy which includes income protection could pay out multiple claims.

Our claims experience bears this out. In 2024, 52% of the income protection claims we paid were on policies that had already experienced at least one prior income protection claim¹. In other words, more than half of all claimants had claimed before, a reminder that the possibility of having multiple income protection claims on a single policy is high.

This pattern is clearly illustrated by one of our policyholders, Simone^*. In 2024, Simone claimed for the fourteenth time on her income protection benefit on the Bidvest Life policy that she took out 12 years ago. The average length of each of Simone’s income protection claims was only 42 days but, in total, she was in claim for 585 days, or 13% of the time that her policy was active. This example illustrates that, while we might think of income protection claims as minor, the overall impact of having multiple periods when you are unable to work can be significant.  

It also highlights the importance of the waiting period that is selected on income protection cover. Simone is self-employed and had a 7-day waiting period on her policy, which means that all her claims were paid from day one of her inability to work. For employed people, conventional financial planning typically recommends a 30-day waiting period, which only pays from the thirty-first day of being unable to work. The logic behind this is that employed individuals have 30 days of sick leave in a rolling three-year period, and therefore do not need cover for the first 30 days of their inability to work.