Welcome to “adulting”, where starting your career is an exciting milestone filled with possibilities, but it is also when you are introduced to some very real financial pressures.
While you’re focused on building your career, building an insurance portfolio should also be a top priority to ensure you’re financially protected should life take an unexpected turn.
Why Young Professionals Need Insurance
The Financial Reality for Young Adults
When you’re young and healthy, insurance might seem unnecessary. However, this is when cover is most affordable and easiest to get. Your premiums are lowest in your twenties because insurance companies consider you statistically less risky to insure.
By securing your cover early, you lock in these favourable rates and ensure protection remains in place even if your health or circumstances change at a later stage.
Common Insurance Myths Among Young People
Many young professionals delay their sign-up for insurance, thinking that:
“I’m too young and healthy to need cover” The truth is, accidents and severe illness don’t discriminate by age.
“Insurance is too expensive” – Starting premiums can be surprisingly affordable when you know where to look and what cover you need. Basic life cover starts at under R100 per month, and comprehensive gap cover plans can be as low as R99 per month with TRA’s Basic Cover 300.
“My employer provides enough cover” – Group life insurance through employers typically offers minimal coverage. This amount rarely covers debts, family support or medical aid shortfalls.
What Are The Essentials?
1. Medical Aid & Gap Cover
Medical aid gives you access to hospital cover and healthcare providers. Without it, emergency treatment can be unaffordable, making it non-negotiable for young professionals.
Medical Aid Options:
- Hospital Plans cover emergencies and in-hospital treatment (typically the most affordable option)
- Comprehensive Plans include day-to-day benefits like GP visits and medication
- Medical Savings Account (MSA) Plans offer hospital cover plus a personal savings account for day-to-day expenses
Gap Cover is an essential supplementary insurance product. Since specialists often charge above medical aid rates, signing up for Gap Cover means you won’t be left with unexpected medical aid shortfall payments.
TIP: Start with hospital cover to avoid late joiner penalties before age 35, add a basic gap cover plan and then upgrade as your income grows.
TRA’s gap cover policies cover 300-700% of scheme rates. Our policies include co-payment cover and provide casualty benefits for emergencies. This is particularly important if you have basic medical aid.
Sign up for TRA’s Gap Cover today!
2. Disability Cover
You’ve started working and have become reliant on earning an income; others may also be reliant on you. Disability insurance protects your income if illness or injury prevents you from working.
Different Disability Coverage Available:
- Income Protection: Monthly payments (60-75% of salary) until recovery or retirement
- Lump Sum: One-time payment for debt settlement and lifestyle adjustments
- Own Occupation vs Total Disability: Own occupation pays if you can’t do your specific job; total disability requires inability to work at all
3. Insuring Your Car & Personal Belongings
Consider protecting essentials, such as your car and other personal belongings with high replacement values, which are essential for productivity and earning an income.
Car Insurance:
- Comprehensive insurance covers theft, damage, and third-party claims. If you are financing your vehicle, it is a requirement.
- Third-Party, Fire & Theft is suitable for older, paid-off vehicles
- Third-Party Only is the legal minimum, but can be risky for work/travel-dependent professionals
Personal Belongings include insuring your laptop, smartphone, and work equipment from damage and theft. Consider “on-the-go” insurance that covers your possessions when you’re on the move.
TIP: Include premiums in your monthly budget, put debit orders in place, and start with basic cover before upgrading.
TRA’s Gap Cover For Young Professionals
Total Risk Administrators (TRA) understands that, despite budget constraints, young professionals still require medical aid shortfall cover. That is why TRA offers accessible gap cover plans:
Basic Cover 300 from R99 per Month
TRA’s Basic Cover 300 provides gap cover protection at an entry-level premium that fits young professionals’ budgets. This policy includes:
- Gap cover for in-hospital tariff shortfalls up to 300% of medical scheme rates
- Casualty cover for accident-related emergency treatment
- Oncology gap benefits for cancer treatment shortfalls
- Policy extender benefit extends medical aid benefits
- Accidental death cover provides additional life protection
- Access to the TRA Assist app
Why It’s Perfect for Young Professionals:
- Affordability: Individual cover starts at just R99 per month
- Comprehensive protection: Covers the most common shortfall scenarios
- No general waiting period: Benefits start immediately
- Flexible family options: Family cover available at R180 per month
Vital Cover Plus from R360 per Month
For young professionals seeking more comprehensive coverage, Vital Cover Plus offers enhanced benefits while remaining affordable:
- All Basic Cover 300 benefits
- Higher coverage up to 700% of medical aid scheme tariffs
- Co-payments
- Extended oncology benefits for comprehensive cancer support
Value Proposition:
- Mid-tier pricing: Suitable for young professionals with slightly higher budgets
- Comprehensive coverage: Addresses more complex medical scenarios
- Future-proofing: Growing coverage as career and health needs evolve
Common Mistakes to Avoid
- Delaying Coverage: Don’t wait for the “right time” – accidents and illness happen unexpectedly, and premiums typically increase with age.
- Underestimating Needs: Consider future obligations, not just your current debts. Factor in inflation and the lifestyle you are working toward.
- Choosing Price Over Value: Selecting inadequate coverage to save money often backfires. Understand policy exclusions and benefit structures rather than focusing solely on price, where possible.
Best Tip Of All: Just Start!
As with anything, it can be overwhelming when you’re trying to do it all at once. Choose one thing and start.
As a young professional, you’re building the foundation for your entire financial future. The decisions you make today about insurance cover will make an impact in the decades to come. Don’t let affordability prevent you from signing up from basic, essential protection when the cost of being underinsured far exceeds the monthly premiums for basic coverage.
Starting small, start with fundamental cover as a solid foundation you can build upon as your career progresses.
One example is TRA’s Basic Cover 300 and Vital Cover Plus options, which provide accessible entry points into comprehensive gap cover protection, ensuring medical aid shortfalls don’t leave you paying out of pocket.
Remember, insurance is most affordable when you’re young and healthy. So act now. Don’t wait for the unexpected to happen.
