By Karen Bongers, 19 May 2020
Despite this, we are radically underinsured for disability. In fact, ASISA says the disability insurance gap stands at R19.3 trillion. Sanlam believes there’s a real need amongst South Africans for simple yet comprehensive disability benefits which are easy to understand. To this end, we have just launched a product to fulfil this requirement.
Most people are oblivious to both the risks of suffering a disability as well as the realities of living with one, says Karen Bongers, Product Actuary at Sanlam Individual Life. “This is evident in the insurance gap, and we believe it presents a critical imperative to raise awareness of disabilities and their impact on people’s lives and their financial realities.”
It’s crucial for financial planners to have these conversations with their clients, as many people have an ‘it won’t happen to me’ mindset, which means they’re completely unprepared for the unforeseen risks linked to becoming disabled, which includes the risk of being unable to earn an income. This is, in fact, the single biggest risk facing a young person with a +40-year career ahead of them.
If the primary breadwinner should be temporarily or permanently rendered unable to work, it will have massive implications for the whole family. Bongers adds that living with a disability can require a tremendous amount of financial and emotional support even if the individual can still work, something that most people don’t consider. “Our new disability offering is designed to provide protection in both of these instances, helping a family to financially withstand the implications of both.”
Sanlam’s new offering comprises four benefits, each suited to a particular client profile. It’s flexible, offering a range of cease ages, plus a Whole Life option, which means cover continues into retirement, for one’s entire lifespan. Each benefit is also available as Accidental-only Cover (disability as the result of an accident), making this the most comprehensive range of accidental benefits in the market.
To date, disability lump sum benefits have only covered clients for permanent conditions, despite the greater likelihood of temporary conditions and the significant financial impact that can accompany these. While it is true that clients can obtain cover for temporary disability via income protection benefits, the reality is that most clients with disability cover only have lump sum cover.
Sanlam’s new benefits include a layer of temporary incapacity cover to protect clients against the risk of health events that are not necessarily permanent but will render them unable to work for an extended period. Claims will be assessed against the Official Disability Guidelines (ODG), an objective international publication containing independent evidence-based return-to-work treatment guidelines. A proof of loss of income will not be required.
Bongers says Sanlam has addressed a significant shortcoming in the market with its new Temporary Incapacity Cover and has also evolved its product range to speak to the requirements of modern-day clients. The employment landscape has changed considerably. People are retiring later, are more likely to make a career change during their working life and could juggle multiple jobs simultaneously. Some may take a sabbatical. Others may be between jobs, given the reality of retrenchments.
“Our new cover acknowledges these realities and caters for such clients in various ways. For example, our new Extended Occupational Disability Cover means that should a client stop working for any reason other than retirement (sabbatical or retrenchment, for example), their occupational disability cover will be extended for up to 12 months. And the fact that a client doesn’t need to inform Sanlam when he or she changes jobs – a valuable feature we’ve carried over from our previous set of benefits – means that cover for occupational disability can seamlessly continue when a client makes a career change.”
The new offering builds on Sanlam’s excellent existing Occupational Disability Cover, with an expanded, comprehensive list of impairment events. The Impairment Cover includes several unique categories like accidental injuries and joint replacements, the latter providing enhanced cover for those living active lifestyles and for clients in retirement.
Bongers says another new initiative is a partnership with Sanlam Trust, which enables clients to provide consent for claims to be paid into the Sanlam Protector Umbrella Trust, in the event that they may have lost their legal capacity to act at the time of the claim. “Given the rise of dementia, this is a much-needed solution as it avoids the often lengthy and costly legal process of having to appoint a curator bonis or administrator.”
Another benefit is linked to the reality of prosthetics. Exoskeletons can cost millions, while prosthetics for arms and legs can cost anything from R12 000 to R900 000. This means Sanlam’s Elite Disability Benefit’s Prosthesis Booster can make a significant financial difference. It pays an additional amount of up to 100% of the cover amount should someone experience a severed spinal cord, need to amputate a limb, or lose the use of their legs due to a neurological disease. The Elite Benefit also covers children for a list of serious illnesses and injuries, helping parents to financially withstand the time which they may need to take off work to care for their child.
Bongers concludes, “Our new disability offering is designed around people’s needs today and each benefit is suitable for a particular client profile, simplifying advice. Temporary Incapacity Cover is also a big differentiator, as is our Whole Life options and comprehensive range of Accidental Benefits. The offering is simple to understand, with comprehensive benefits that continue to demonstrate why Sanlam is a market leader in disability cover.”
Speak to your financial planner about an obligation-free needs analysis using the secure online platform, Sanlam Now Cover.