South Africa has just entered a recession and recessions usually come with job losses. One way that you can prepare yourself for the worst is through an income protection plan that provides retrenchment cover
Income protection plans generally provide monthly payments if you lose the ability to perform your job due to reasons such as illness or injury. These plans will often pay you up to 100% of the income you would have received if you had continued in your job (If you were still employed). The level of cover you choose affects your premium. Plans that provide retrenchment cover typically pay your monthly salary for up to 6 months after retrenchment. This is designed to give you freedom to look for alternative income without having to worry about money.
Some life insurance plans will have income protection with retrenchment cover included. If you already have life insurance, it may be a good idea to check if the life insurance policy includes such an option.
Another important thing to note is that different insurers will have different terms and conditions. Some insurers may have a one month waiting period before the retrenchment cover kicks in. This means that payments start coming in from the second month after retrenchment. There may also be rules that cover only becomes available if you have been employed for a certain number of months or years without any breaks in employment.
As always it is important to go through the finer detail and ensure that you understand the product offered by the insurer.