Go the distance to protect your income

Seventy per cent of UAE residents don't have income protection or critical illness cover. So how do you support yourself if you get injured and cannot work?

Gary Clement for The National

"Life is a gamble. You can get hurt, but people die in plane crashes, lose their arms and legs in car accidents; people die every day. Same with fighters: some die, some get hurt, some go on. You just don't let yourself believe it will happen to you."
But Muhammad Ali did get hurt, and he now suffers the daily degeneration that Parkinson's Disease brings about. Opinion is still divided about whether The Hardest Game is to blame.
You don't need to be a boxer or take part in extreme sport to be at risk.
In our lifetime, we're more likely to die of things we do every day, or don't even think of, rather than something like a plane crash. But if we're dead, we're dead. I'm focusing on what happens to us if we are injured and live.
It's great if you just get up and walk away. Not so super if you need physiotherapy or more invasive medical intervention. And yes, people do end up in intensive care because of what I'm calling stupid injuries.
It could be a freak hit to the head or slipping on stairs. It could be because you're on your mobile phone. In the United States, mobile phone-related injuries - talking or texting while walking, never mind driving - are up 35 per cent since 2010.
I experience escalator rage regularly - and door rage too. Why do people come to a standstill right at the bottleneck to check their phones? These mobile zombies can and do cause injury, not just to themselves but to others too.
What would happen to you if you were hurt and couldn't do your job? We all have medical insurance in the UAE - the law dictates this - but can you support yourself and your dependents if you can't work because of a stupid injury? How long will your employer keep you on if you're being treated for a chunk of time?
Chances are you'll need to dip into your emergency fund (please tell me you have one), as 70 per cent of people in the UAE don't have income protection or critical illness coverage. That's according to Lifecare's business operations manager, David Noakes. I'll leave critical illness coverage for another time.
David explains that income protection is key but is massively overlooked. People assume that medical insurance is all they need. Wrong. It will only pay for medical bills it covers.
He adds: "If you're responsible for paying for school fees, rent and life's expenses, how will you do this if you don't earn?"
Good point. Plus, there's a waiting period to get through before any claim can be looked at. This could be three months or up to 18.
Income protection can pay out 70 to 75 per cent of your monthly salary for the rest of your life, if you can no longer work and you've got the plan that covers you for it. Some policies want you to take on any employment, not what you are qualified for or did before the incident, so be careful and check all the details.
The other thing to think about is who you sign up with. This is a difficult one in this market unless you choose a credible brand with a track record. You'd do well to take heed of the UK bank scandal in which payment protection insurance was mis-sold to people who would never be eligible to claim it and banks wriggled out of compensating them when challenged.
Income protection as an employment perk is exceedingly rare in the UAE. I know of only one company that does this. It pays about Dh270,000 a year to provide this for its staff of 27 - I don't like what it sells for a living, but I love that it looks after its people.
Failing working for a similar outfit, take out your own plan. I'm sure these two wished they did:
One mother giving her children a shower slipped, got her fingers caught in a hinge and heard an awful snap. Two surgeries (that were not what she needed for her injury) later she is still unable to type, unscrew lids, drive or generally use her dominant hand in everyday life. She hasn't worked in months.
A burly businessman with a rugby player build showering in a five-star hotel in an African country slipped and grabbed the shower door. The door then shattered (these doors are not supposed to shatter this way, but bribery and backhanders meant doors that didn't meet specifications were fitted, as they were cheaper, and the difference was pocketed). The glass sliced into his thigh, leaving a gash of butcher-knife proportions. He was flown to two countries to find appropriate treatment. To say that he won't be up and about any time soon is an understatement.
We can't control everything in life. What we can do, though, is be best prepared.
I read that Muhammad Ali's net worth was about US$50 million a year ago. I don't know if this is true, but chances are he has his life's expenses covered. So unless yours are too, I strongly suggest you get your income protected - and keep your fingers off your mobile phone and firmly crossed instead, with the hope that any waiting period you need to go through will be accident-free.
Nima Abu Wardeh is the founder of the personal finance website cashy.me. You can reach her at [e-mail] and find her on Twiiter at @nimaabuwardeh.
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