More questions to ask your employer about employee benefits

Are life cover benefits approved or unapproved? Approved group cover is held in the name of a retirement fund and is subject to the fund’s rules, Gareth Collier, a director of financial planning firm Crue Invest, says. The trustees of the fund will decide who is entitled to the proceeds of these benefits. The premiums are paid by the fund (usually from the employer’s contributions), and the employer can claim a tax deduction, he says. Unapproved group life policies are quantum of life cover, Collier says. For instance, your life cover could be set at twice your annual income. So, if you earn an income of R500 000 a year, your group life cover will pay out R1 million on your death. You need to determine whether the level of life cover is sufficient for your needs. Once your group cover is in place, you should ask your financial adviser to draw up a financial plan to determine whether you need any additional life or disability cover to supplement What income will be protected if I am disabled? Income protection is a great benefit, but you need to know exactly what it covers. Gareth Collier says this benefit normally pays between 75 and 100 percent of the income you are earning when you become disabled. You need to ensure this income is sufficient to cover your living expenses, as well as help you to save for retirement, if you become disabled. If there is a shortfall, you could increase your lump-sum capital disability cover.

At what rate does the income protection benefit increase annually? At the very minimum, your income protection benefit should increase annually in line with inflation, Collier says.

Does it cover temporary and permanent disability? It is important to have a benefit What is the value of this cover? Similar to life cover, a lump-sum or capital disability benefit is normally a multiple of your annual salary. Gareth Collier says you should ensure that you have sufficient capital disability cover to settle your debt and make structural changes to your home and vehicle. You also need to cover your income, but that is best matched your group cover, Collier says.

What is the free cover limit attached to this benefit? The life assurance company that your employer or retirement fund is using will analyse the risk profile of the group as a whole and will determine a level of risk cover that the members of the group can enjoy without any medical underwriting. This benefit would be significant for anyone who has a medical condition or a pre-existing condition or illness, Collier says. with income protection cover.

What are the policy exclusions? Collier says it is important to know what exclusions apply, particularly when it comes to occupational hazards, travelling out of South Africa and dangerous activities. If you participate, for

If I resign from the company, is there a continuation option that will allow me to keep this cover in place in my personal capacity? A continuation option is a significant benefit, Collier says. Without it, if you resign for whatever reason, your group cover will fall away. You will need to apply for cover in your personal capacity, which will be subject to individual underwriting, and this could result in exclusions on your policy, particularly if your health has deteriorated. instance, in scuba diving, motor cross or sky diving, you need to ensure that these activities are not excluded. Similarly, if your job requires travelling abroad, ask if the cover extends to the countries you visit, because some policies exclude certain countries.