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Companies continually face the complex question of whether they should allow an insurer to underwrite the cover offered under their group life benefits, or whether the retirement fund can afford to carry the risk on its own.
In deciding on this issue, the size of the fund and the extent of risk involved should be considered first – inter alia, to ensure that there will be adequate cash flow to cover claims. Sanlam's extensive employee benefits consulting division can help you make this decision.
Generally, it is accepted practice these days to insure group life cover risks with an insurer, especially with the prevalence of HIV/Aids and the resulting legal demands on employers. Underwriting your risks will offset the immediate financial pressure caused by the payment of substantial lump sum benefits and the long-term pressure arising from payment of continual benefits to dependants.
Sanlam has achieved market leadership in underwriting risks. We limit cross-subsidisation between clients and product lines by means of expert and accurate pricing. We do not have loss leaders, nor do we underquote to attract new business. As a result, our clients pay premiums that, over time, accurately reflect the risks we underwrite.
Sanlam helps companies to cover benefit risks with an extensive range of products that will also enhance their attractiveness as employers of choice:
Group Life Assurance
Spouse's Assurance
Funeral Aid Scheme
Accident Benefit
Credit Insurance
Mortgage Cover
Group Trauma Assurance
Care Benefit Cover
Group Life Assurance
Sanlam offers Group Life Assurance (GLA) either under an independent group life scheme or under a pension/provident fund. We can define cover in various ways and combinations per category of employees – for instance, as a lump sum payout (multiple of salary or fixed amounts) that may also be combined with spouse's and children's pensions.
Spouse's Assurance
Providing cover for spouses of employees has become an important employee benefit. In catering for this need, Sanlam provides insurance for the spouse of an employee already insured under a group policy. This may apply to all married employees or to married male employees only. The employer or members decide in advance whether they want cover equalling once or twice the employee's annual salary.
Funeral Aid Scheme
The South African market's peculiarities of a high unemployment rate, coupled with traditional customs of having more than one spouse, inevitably translate into increased funeral costs. In response to this, Sanlam's Funeral Aid Scheme for groups covers members with a small, fixed amount when a member of the family dies – be it a spouse, child, parent or parent-in-law. Cover is also available for a additional spouses and major dependant children.
Accident Benefit
Employers can arrange for an accident benefit to be paid at the death of a member resulting from an accident before retirement and before the normal retirement age, and while the member is still in service. In terms of this benefit, an additional amount equal to a certain percentage of the member's life assurance is paid. This may vary from 25% to 100%.
Credit Insurance
Institutions allowing credit should ensure that they are covered for the associated risks. The most frequent example occurs when co-operations grant credit to their members. Sanlam's Credit Insurance takes care of this risk, and makes provision for payment of an amount equal to the assured's outstanding debt. The premium for the outstanding credit is usually paid by the creditor and recovered from the assured.
Mortgage Cover
Mortgage cover is basically the same as ordinary group life insurance, except that at the member's death, his or her cover is equal to the outstanding mortgage as at the scheme's anniversary, or it can remain the same as the outstanding mortgage during the year.
Group Trauma Assurance
Major traumas could inflict devastating financial burdens on employees and their affected family members. This burden is best shared under a group scheme such as Sanlam's Group Trauma Assurance, which pays out as soon as Sanlam is satisfied with the diagnosis of a traumatic disease.
There are two options available:
- Group Trauma Insurance: Standard Cover
- Group Trauma Insurance: Comprehensive Cover
A seven-day waiting period applies to both options.
The Standard Cover scheme covers cancer, paraplegia, chronic renal failure, coronary artery bypass surgery, myocardial infarction, stroke, blindness, organ transplant, major burns and deep coma.
The Comprehensive Cover scheme covers the same conditions as the Standard Cover scheme with the addition of accidental HIV infection, Alzheimer's disease, angioplasty, aortic artery surgery, aplastic anaemia, arrhythmia, benign brain tumour with malignant behaviour, blindness in one or both eyes, cardiomyopathy, chronic liver failure, end stage lung disease, heart valve surgery, loss of hearing, loss of limb function due to medical causes, major burns, motor neurone disease, multiple sclerosis, muscular dystrophy, Parkinson's disease, pulmonary embolism and sero-positive rheumatoid arthritis.
Care Benefit Cover
Deaths due to HIV and Aids are seriously affecting the welfare of South African employees and are putting more and more pressure on an already overloaded public health system. Sanlam's Care Benefit Cover product has been designed to assist Aids victims and other terminally ill people to cope with the terminal stage of their disease. It is the only product on the market to do so. Employers can thus give all employees comprehensive cover through modest premiums. Sanlam offers both Care Benefit Cover (payouts to terminally ill employees) and Family Protection Cover (payouts to the family of a terminally ill employee, on his or her death). |
