Definition and Description of Disability Benefit

The Occupation Disability Benefit pays the benefit amount as a lump sum if:

DISABILITY FOR REGULAR OCCUPATION – the insured life suffers a disability caused by a bodily injury or illness to such an extent that he is totally and permanently unable to perform the normal duties of his own occupation.

DISABILITY FOR REGULAR AND REASONABLE ALTERNATIVE OCCUPATION – the insured life suffers a disability caused by a bodily injury or illness to such an extent that he is totally and permanently unable to perform the normal duties of his own occupation or similar occupation.

Disability Cover also known as:

Disability Cover has different names at different product providers. Some of the benefits are similar, but there is not one that is exactly the same as another. Some of the names for disability cover at leading insurers for their products are:

• Own occupation disability benefit – total and partial payout levels:

Comprehensive ADW Disability Benefit;

Comprehensive Disability Benefit (own/similar );

Capital Disability (Comprehensive Plus);

Absolute Protector;

Functional Impairment plus Disability for regular and reasonable alternative occupation.

• Own occupation disability benefit – total payout levels only:

Comprehensive Disability Benefit;

Comprehensive Disability Benefit (own);

Capital Disability (Comprehensive Plus);

Absolute Protector;

Functional Impairment plus Disability for regular occupation.

• Disability benefit for similar occupation – total and partial payout levels:

Comprehensive ADW Disability Benefit;

Comprehensive Disability Benefit (own/similar );

Capital Disability;

Absolute Protector, and

Functional Impairment plus Disability for regular and reasonable alternative occupation.

• Disability benefit for similar occupation – total payout levels only:

ADW Disability Benefit;

Disability (own/similar);

Capital Disability (Core);

Capital Disability;

Occupational Disability Benefit;

Comprehensive Disability Benefit:

Disability for regular or reasonable alternative occupation.

The different names are very confusing! All the different benefits are classified as disability benefits, but there are no two benefits with exactly the same definitions. It is very difficult to compare different providers’ solutions. The best approach would be to find a qualified and experienced financial advisor representing big brand product providers to compare, and find the benefit that will best address your unique needs and circumstances. 

Disability Benefit is used for:

The disability benefit is a cost effective way of providing for occupational disability needs:

• Loss of income:  Provides funds that can replace the income lost in the event that the insured life becomes unable to perform the duties of his own occupation.

• Financial security:  Provides funds that may be used to ensure that the current standards of living of the insured life can be maintained.

• Debt protection:  Provides funds that may be used to help pay off mortgages and other outstanding debts.

What should you consider when searching for Disability Benefit:

The price (premium) for disability benefits are different at the different providers for a very good reason! The reason being that the definition of the disability benefit for how what kind of benefit it is, when claims will be paid, how claims will be paid and many more important factors are different. A general rule of thumb is that you pay the price for what you get. Never assume that if the name of the benefit indicates that you will have a claim when you think you are disabled! Some of the more important factors to look at when you are searching for disability cover are:

• Description:  The disability benefit does not only differ between different providers but you get different descriptions and prices of the benefit at every single provider. Some disability benefits will pay when you are disabled to do your own occupation, and others will pay when you are disabled to do your occupation or a similar occupation. Other benefits again will pay when you can not do specific functions of your daily tasks. Point being, do not assume that you have a disability benefit that will pay when you expect it to pay just because the name of the benefit is ‘disability benefit’.  Alarm bells should start ringing if the benefit is promoted on price only, and not the important factors of the benefit as discussed here!

• Waiting Periods:  For how long must you be ‘disabled’ before the benefit starts paying, and if/when it starts paying out, how will it pay? Will you receive a lump sum or will you receive a proportionate payout? How will a possible claim affect your other benefits on the policy?

• Exclusions:  Ensure that you know if there are exclusions, and if so, what are the exclusions? Some cheaper forms of the disability benefit, for example will exclude certain back conditions at some providers, but you have the option to include these options at a price, of course!

• Term:  It is important to note that disability benefit is not provided to enrich a person, but only to replace an income that would otherwise have been earned up to your retirement age. For this reason, disability benefits are capped, and you must still make provision for your retirement.

• Price:  If a disability benefit is included on a policy, the proportionate part of the premium normally falls away when you reach the age that the benefit is not applicable anymore (after retirement age). Some insurers however, to ensure a cheaper initial premium and thus attracting more business, price the benefit over the overall term of the policy, even after the benefit is not applicable anymore.

Above-mentioned factors to look at when searching for a disability benefit, are only a few of the more important factors to look at and, will hopefully make you realise that you must not only look at the price of a policy, but to be aware of the probability of a valid claim, given the definitions of the disability benefit you are buying.

What to do to find a quality Disability Benefit!

The best solution would be not to be influenced by gimmicks of cheap policies and probable cash backs, and to rather get advice from experienced qualified financial advisors representing big brand product providers, in your town. Advisors are trained to recognise above-mentioned pitfalls, and can find you solutions that will address your unique circumstances for true peace of mind.

Definition and Description of an Income Protector

The Income Protector products offer the client cover in the event of loss of income due to injury or illness, from his or her regular occupation, and/or for the overhead expenses of his or her business. The insurer will pay the benefit in instalments monthly when the life insured becomes disabled.

Income Protectors are also known as:

Income protectors are known by different names at the different providers, each with its unique definitions for benefits. Although income protectors’ definitions differ, the basic benefit is providing income in the event of loss of income due to injury or illness. Some of the respected provider product names are:

• Income Protector;
• Basic Disability Income Benefit plus Extended Disability Income Benefit (own occupation);
• Income Continuation Benefit;
• Extended Absolute Income Protector;
• Occupational Disability Income Benefit (own).

If it was only the names of the benefits that were different, it would have been easy to compare products, but unfortunately, it does not work that way. Waiting periods, when the benefit pays and what it pays, are all factors that should be considered before you can compare the premiums. An experienced financial advisor will help you to find an income protector that is best aligned to your unique circumstances and price expectations.

Income Protector is used for:

• Loss of income:  The Income Protector is an ideal solution for an insured life who needs the security of knowing that he will be paid an income if he should be unable to perform the duties of his occupation, or suffers one of the defined illnesses or impairment claim events. The monthly claim amount may be used to ensure that the current standards of living of the insured life can be maintained.

How much income protection do you need?

When you decide that you need an income protector, it would be a good idea to calculate how much you need, and to determine the waiting period (influences your premium) you should implement, in the following sequence:

1. Determine how much income you need to survive, and if applicable, how much income you need to cover business overheads in case a sickness or injury prevents you from working.
2. Determine how long your current savings or reserve funds will last you. This will indicate to you how long a waiting period you could implement on your income protector. A longer waiting period will be much cheaper than a shorter one, because you are a smaller risk to the product provider.
3. Compare the current provisions you have at your employer and your own provisions, with what is required in Step 1.
4. Your answer will be Step 1 minus Step 3, and the waiting period will be determined by your answer in Step 2.
5. Contact a financial advisor should you need more information, advice or help with calculations.

Definition and Description of Functional Impairment

The Functional Impairment Benefit will pay a percentage of the benefit amount as a lump-sum, if the insured life meets the requirements of one of the defined functional impairment claim events.

Different names for Functional Impairment benefit:

Functional Impairment is known by different names at different product providers. Some of the names at more well known product providers in South Africa are:

• Functional Impairment Benefit;
• Impairment;
• Functional Impairment Benefit;
• Comprehensive Impairment Benefit;
• Physical Impairment Benefit;
• Core Impairment Benefit;
• Daily Tasks Benefit;
• Absolute Impairment Benefit.

Not one of the definitions for products at different providers are the same. Use Plandirect’s offer to find the functional Impairment benefit that is best aligned to your expectations of benefits, definitions and price.

Functional Impairment is used for:

• Limited capabilities as a result of the impairment:  An injury or illness could physically limit the capabilities of the insured life, although not necessarily limit his ability to earn an income.

• Funding for specialised equipment:  Provides funds that may be used to finance specialised equipment and building needs, and any other changes needed by the insured life to adjust his lifestyle.

• Loss of income:  Provides funds that can replace the income lost in the event that the insured life becomes unable to perform the duties of his own occupation.

• Financial security:  Provides funds that may be used to ensure that the current standards of living of the insured life can be maintained.

• Debt protection:  Provides funds that may be used to help pay off mortgages and other outstanding debts.

How do you decide if Functional Impairment is for you?

A good approach to decide about necessity for Functional Impairment is:

1. Look at disability benefit and functional impairment together;

2. Access what the possibility for disablement for your occupation is vs. functional impairment when you have a functional impairment claim. The chance of being declared disable will depend on the kind of work you engage in. To illustrate using an example: An office worker sitting behind a desk most of the time, is less likely to receive a disability payout for occupational purposes than a surgeon. For the office worker it might be more beneficial to apply for more functional impairment.

3. If it is difficult to access your probability of disability vs. functional impairment, you can apply for a combined disability and functional impairment kind of benefit. Although it might be a bit more expensive, you will have the peace of mind that you will receive a payment for functional impairment if you are not disabled for occupation purposes.

4. Contact a JPE Broker if you would like a specialist in this field to assist you with the above-mentioned decision.

How much Functional Impairment do you need?

Functional Impairments are normally limited to a maximum amount together with disability benefit at any one product provider. The calculator that is used to calculate the disability you need, and how much you will probably be allowed at any one product provider, can be used to give you an indication of how much functional impairment you will probably qualify for. Contact a JPE Broker representing big brand product providers, if you need more information or advice regarding functional impairment.

Definition and Description of Critical Illness Benefit

The Critical Illness Benefit pays a percentage of the benefit amount as a lump sum if the insured life meets the requirements of one of the defined critical illnesses.

Critical Illness Benefit also known as:

Critical Illness Benefit is known by different names at different product providers. Some of the names at more well-known product providers in South Africa are: 

• Critical Illness;
• Critical Illness Benefit;
• Severe Illness Benefit;
• Living Lifestyle;
• Dread Disease Benefit;
• Trauma Benefit.

Not one of the definitions for products at different providers are the same! Use Plandirect’s offer to find you the Critical Illness Benefit that is best aligned to your expectations of benefits definitions and price.

Critical Illness Benefit is used for:

• Expenses incurred as a result of critical illness:  Provides funds that may be used to settle any expenses incurred as a result of the critical illness. 
• Financial security:  Provides funds that may be used to ensure that the current standard of living of the insured life can be maintained upon the diagnosis of a life-altering event.
• Financial support for recovery:  Provides funds that may be used to help survivors of life-altering illnesses to meet the expenses associated with recovery or rehabilitation.
• Reduction of income: The insured life may be advised to scale down his work duties or change his occupation. The benefit provides funds to supplement the income of the insured life, should he lose any income as a result of this change.

How much Critical Illness Benefit do you need?

There is no exact answer regarding the question of how much critical illness benefit you need! This is something you must decide about yourself. A starting point could be to look at your gene pool. Is there a critical sickness event that occurs on a regular basis in your family? What is your lifestyle? Statistics at one of our major suppliers and a well respected product provider in South Africa, are that about 80% of all critical Illness claim events are for one of four sickness events, namely, CANCER, MYOCARDIAL INFARCTION, STROKE or CORONARY ARTERY BYPASS GRAFT. If one of these events are common in your family, you could be more motivated to consider critical illness, and you will know how a critical illness event could financially ruin you!

Definition and Description of Accident Cover Benefits

As with all the other benefits from different insurers, accident benefits have different descriptions, and prices can not be compared with each other because the names are similar. At the better known, major, respected insurers in South Africa you will find mainly 3 kinds of accident benefits. With ACCIDENTAL DEATH The Insurer will pay the benefit as a lump sum in the event of the life insured’s death, resulting directly and solely from a bodily injury.With ACCIDENTAL INJURY The Insurer will pay the benefit in the form of a defined percentage of the cover amount linked to the particular claim event as set out below. With ACCIDENTAL DISABILITY The Insurer will pay the cover amount as a lump sum if the life insured becomes disabled as a result of an accident.

Accident Benefits are also known as:

Some of the names the accident benefit is also known by at some of the major roleplayers in the financial services industry are:

• Unnatural Death Benefit;
• Accidental Death Benefit;
• Accidental Disability and/or Death Benefit;
• Accidental Injury.

Accident Benefits are used for:

• Financial security:  Provides funds that may be used to ensure that the current standard of living of the beneficiaries of the policyholder can be maintained.
• Debt protection:  Provides funds that may be used to help pay off mortgages and other outstanding debts.