Life Assurance
Mark is an expert on all aspects of Life Assurance.
If you need advice or would like a quote please contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
Set out below is an explanation on different aspects of Life Assurance and its Axillary Benefits.
To read the explanations please click on the Link below
- Life Assurance
- Terminal illness
- Immediate Needs Benefit
- Guaranteed Premium Review Period
- Capital Disability Cover
- Dread Disease Cover – Severe Illness Benefit Cover or Critical Illness Cover
Waiver of premium
- Income Protection
- Cash Conversions / Proffit Share or Maturity Values at Age 65/66
Life Assurance
Life Assurance pays out irrespective of how a person dies. It even covers you for Suicide once the policy has been in force for longer than two years.
All policies are incontestable unless fraudulent. This means the insurance company cannot contest the policy provided you told the truth about your health when taking the policy out. In fact 98% of all claims are paid out by Life Assurance Companies.
It will take approximately three weeks to pay a claim for a person who died from natural causes. It may however, take longer if a person died from Un-natural causes. The reason is that the police need to indicate the cause of Death and who, if anyone was responsible.
For expert advice contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
Terminal Illness Benefit
If you are Terminally Ill and have less than 12 months to live most companies will pay out 100% of your Life Cover before you die. This will allow you to restructure your affairs and possibly even minimise certain taxes. (You need professional advice on this)
For expert advice contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
Immediate Need Benefit
Most companies will pay out an amount of approximately R50 000 within 48 hours of your death in order to assess the family financially.
You need to appoint any Immediate Needs Beneficiary up front in order for them to be paid the proceeds.
Please note: This R50 000 payment will come of the eventual Pay Out. E.g. Life Cover R5 000 000. If a R50 000 Immediate Needs Benefit is paid out then when the final claim is paid it will be for R4 950 000.
For expert advice contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
Guaranteed Premium Review Period
The Guaranteed Premium Review Period normally runs for 10 years. At the end of the Guaranteed Review Period the Insurance Company will review the policy to see if the Mortality projections were met. If there were higher than expected, then the Insurance Company has the right to increase premiums in order to keep all the cover in force.
Most companies will have a maximum increase of 25%. This means that if they have to increase your premium the maximum, they can increase premiums by is 25%. This is over and above the normal annual premium increase for that specific year. E.g. Normal Premium Increase 10% Guaranteed Premium Review increase 25% total increase that year 35%
Having said this most policies today are underwritten for Whole Life and are not designed to have an increase after 10 years.
You need someone who will point this out to you as the Guaranteed Premium Revies periods vary from company to company
For expert advice contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
Capital Disability Cover
Capital Disability Cover will pay out a Lump Sum Disability Benefit to you and your Permanent Disability.
It covers you for Physical Impairment and your inability to work permanently in your Nominated Occupation.
You need an expert to provide you advice as the difference in Cover between companies as the difference is huge.
Example
You can have a policy that is either an Accelerated Benefit or a Stand-Alone Benefit.
An Accelerated Benefit is linked to your Life Cover and in the event of a claim it will reduce your Life Cover by the amount of the Disability Claim. E.g. Life Cover R5 000 000 Capital Disability Cover R2 000 000. In the event of a claim your Life Cover will reduce theR3 000 000.
Non-Accelerated Capital. This is the recommended benefit to have as it runs separately to your Life Cover, this means that should you have a Disability Claim it will not affect your Life Cover or any other benefits on the policy. E.g. Life Cover R5 000 000 Capital Disability Cover R2 000 000. In the event of a Capital Disability Claim your Life cover will remain R5 000 000.
Please note: With the exception of one company the Capital Disability Benefit will fall away after a 100% claim. If the Capital Disability benefit falls away your premium will reduce.
With one Company the Capital Disability Benefit will Reinstate after 14 days allowing you to have Multiple Claims on Disability. And yes, you can become disabled more than once. E.g. You have a Major Stroke leaving you paralysed down one side. (Disability Claim No: 1) Five years later you contract Stage IV Cancer. This would also be a Capital Disability Claim or claim number 2.
Both an Accelerated Capital Disability Benefit and a Non-Accelerated Capital Disability Benefit cover you for Impairment and Occupational Disability.
Impairment: This will pay a benefit to you if you are physically impaired for a defined, stated Impairment where you are still capable of working. The benefit will be paid at a percentage stated in your Policy Schedule. E.g. You lose a leg but can still work. You will be paid 100% of your cover for the loss of a leg even if you can still work.
Nominated Occupation: This benefit covers you for any reason you are not able to work on a permanent basis as a result of an illness or an accident from your Nominated Occupation.
The cover continues to age 65 or 70 and then with most companies it falls away.
There are however a number of companies that will convert your Capital Disability Cover to Dread Disease Cover at age 65 or 70,
You need a Broker who understands all the intricacies of capital disability cover in order to provide you with the correct and appropriate advice as there is sometimes a big difference in cover provided by the different companies.
For expert advice contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
Dread Disease Cover – Severe Illness Benefit Cover or Critical Illness Cover
These are all different names for the same cover. For ease of reference, I will refer to the above cover as Dread Disease Cover.
Dread Disease cover pays out on the confirmed diagnosis of certain defined Medical Events with most companies covering approximately 350 listed Medical Events.
They will pay out depending on the severity of the medical event with cover ranging for most companies as follows : 5%, 10%, 15%, 25%, 50%, 75%, and 100%.
Some companies will pay all claims of 25% upwards at 100% with some companies paying well in excess of 100%. Up to a maximum of 215%
E.g. Should you have a Major Heat Attack
Company A, C , D, E and F etc a will pay a 100% Benefit
Company B will pay a 150% Benefit
Most companies will pay Multiple Claims for Unrelated Medical Events with one company paying Multiple Claims for the Same, Related and Unrelated medical events.
You will need expert advice to decide which company to choose in order to provide you with the cover you are most comfortable with.
For expert advice contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
Waiver Of Premium
Waiver of Premium on your policy will pay the premiums of the policy to age 65 if you are classified as being Permanently Disabled.
Please note that at age 65 you are obliged to then continue to pay premiums.
There is one exception and that is a major company that only deals with Graduate Professionals. They do not have Waiver of Premium Cover which I believe is essential to have.
For expert advice contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
Income Protection
Income Protection will start to pay you an income after a waiting period of either 7 days, 14 days, 1, 3, 6 or 12 months. The cover will continue either Age 65, aged 70 or Whole Life.
The cover normally increases at a defined percentage i.e. 5% or CPI, there is one company which provides a guaranteed increase while in Clain of CPI +3%. i.e. Inflation 5% you will have an Annual In Claim increase of 5%+3% = 8%
Income Protection covers you as a result of an illness or an accident if you are off work for longer when you’re waiting period.
Some companies will even pay you an income for up to 6 months should your wife or child become Terminally Ill.
You need an expert to guide you through the different cover in the market.
For expert advice contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
Cash Conversions / Proffit Share or Maturity Values at Age 65/66
Some companies will pay a Cash Benefit at age 65/66.
This money is paid out Tax Free but varies greatly from company to company.
At some companies this benefit is included in the premiums whilst you have to pay extra at other companies for this benefit.
For Expert advice on Life Assurance or for a detailed comparison please contact Mark Fuhr CFP® 082 882 1602 or email him on mark@whytrust.co,za.
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