What are the Exclusions on Retrenchment Insurance?
Retrenchment insurance is no reason start mocking your manager on Facebook. Mostly because it doesn’t cover getting fired. Retrenchment cover is a type of salary protection for the event of retrenchment. If you lose your job because you got retrenched, then your retrenchment insurance policy comes into play. You can claim from it to cover a portion of your salary for a limited time.
Retrenchment cover is a great insurance policy to have back you up, because losing your job can happen at any time. Before you take out an insurance policy, though, it is good to consider its exclusions. These can help you determine whether retrenchment insurance is the kind of salary protection you’re looking for.
Retrenchment Cover Exclusions
1. Retrenchment Cover is only for Retrenchment.
Retrenchment cover is not a comprehensive salary protection insurance policy. As mentioned, it does not cover you if you get dismissed from your job or if you electively leave (or quit). It also does not cover you in the event that you become disabled and are unable to work.
A disability insurance policy will cover this, even if the disability is temporary. The same is true of a dread disease. If a dread disease leaves you unable to perform your daily work functions, then a retrenchment insurance policy will not cover your salary. A dread disease insurance policy will.
2. Retrenchment Cover is for a Limited Time Only.
Retrenchment insurance gives you time to get a new job, but it does not cover you indefinitely. If you lose your job and your retrenchment insurance kicks in, it will most likely only cover your salary for six months. The length of time you get cover differs from insurance company to insurance company.
3. It Only Covers a Portion of Your Salary.
Most retrenchment insurance policies don’t cover your whole salary. Sorry. No trips to club med allowed. It covers a percentage of your salary, allowing you to stay afloat. It’s meant to give you enough money to make home and car loan payments, buy food etc.
4. Retrenchment as a Benefit on Another Policy Only Covers the Premium.
Many other insurance policies come with a retrenchment benefit. This benefit only covers that insurance policy’s premiums and not your salary. Do not think that having a retrenchment benefit on a life insurance policy will cover your whole salary.
Looking for retrenchment insurance or other forms of salary protection? Fill in our online form to get started.
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