FNB prod­uct can cut pre­mi­ums ‘by up to 50 per­cent’

Weekend Argus (Saturday Edition) - - MEDIA& MARKETING -

First National Bank (FNB) has launched a life as­sur­ance prod­uct, re­stricted to its ac­count-hold­ers, that, FNB claims, can cut your pre­mi­ums by up to 50 per­cent.

The pol­icy, which is un­der­writ­ten by FNB’S as­so­ci­ated com­pany, RMB Struc­tured Life Lim­ited, pro­vides cover in the event of pre­ma­ture death, as well as op­tional cover for in­ca­pac­ity (you can­not per­form var­i­ous daily ac­tiv­i­ties) and re­trench­ment (a lump sum equal to five per­cent of the life cover up to R100 000, and the pre­mi­ums are paid for six months).

The death cover is for life, but the in­ca­pac­ity and re­trench­ment cover is lim­ited to age 60. There are two premium op­tions:

A guar­an­teed premium for the first five years, which may then be in­creased, de­pend­ing on your claims his­tory. How­ever, FNB says the pric­ing has been done as if for life, so it does not ex­pect any sig­nif­i­cant premium in­creases over the as­sured pe­riod.

A premium that es­ca­lates at five per­cent a year. This op­tion al­lows for a lower ini­tial premium.

The amount of your monthly premium will de­pend on the additional ben­e­fits you choose, your age, gender, in­come, ed­u­ca­tion, smoker sta­tus and gen­eral state of health.

Although this is a di­rect-sell prod­uct, it is not a “group” prod­uct where the low-risk pol­i­cy­hold­ers cross-sub­sidise the high-risk pol­i­cy­hold­ers.

Prospec­tive pol­i­cy­hold­ers have to an­swer ques­tions about their health – the an­swers to which will af­fect their pre­mi­ums – and un­dergo an HIV test.

The in­ca­pac­ity ben­e­fit pays out only once and will re­duce the life cover by the amount of the ben­e­fit paid. If the in­ca­pac­ity ben­e­fit equals the life cover, the en­tire pol­icy ceases.

The in­ca­pac­ity as­sur­ance is not dis­abil­ity as­sur­ance but is based on things such as whether you can no longer do your job. It pays out if you are to­tally and con­tin­u­ally un­able to wash, dress or feed your­self, or per­form phys­i­cal ac­tiv­ity. It also pays out if you suf­fer from any of 20 se­ri­ous con­di­tions, rang­ing from a stroke, a heart at­tack and can­cer to loss of hear­ing, sight or speech.

There are a num­ber of ex­emp­tions and qual­i­fi­ca­tions for the pay­ment of the in­ca­pac­ity ben­e­fit, which is based on a points-scor­ing sys­tem ac­cord­ing to your in­abil­ity to per­form daily ac­tiv­i­ties. You need a min­i­mum of six points to qual­ify for a ben­e­fit.

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