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Business Person Elect questions previously asked
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Question:
Does FMI offer any income protection plans for people receiving salaries that can be deducted from tax?
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Answer:
FMI does cover salaried employees, with some benefits being tax deductible.
The premiums for the following benefits are tax deductible under section 11(a) of the Income Tax Act 58 of 1962:
- Temporary Income Protection (TIP)
- Permanent Income Protection
- Business Overhead Protection
- TIP Dread Disease Enhancer
Because these benefits have tax deductible premiums, any benefit payouts from the above benefits will be taxed in the hands of the policy holder. FMI do not deduct from the claim amount for tax; the onus rests on the Life Insured to declare the benefit pay out to SARS.
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Question:
Why not increase age bracket for females to age eg. 34 on your accident only benefit as stats show they are more careful in general?
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Answer:
In the interest of keeping the product simple, we kept the ages the same for males and females. Thank you for your product idea, they are always welcome and taken into consideration.
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Question:
When will Financial Advisers receive their new quotes packages?
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Answer:
The updated quotes package is available to download off our website (http://www.fmi.co.za/quotes.aspx), alternatively please contact your FMI Financial Adviser Consultant and/or FMI Business Developer to visit you or courier an updated quotes package to you.
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Question:
How do the enhancements and rates reduction effect existing clients?
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Answer:
FMI will be running a special offer from the 1st July 2010, whereby existing income protection policyholders (FMI and non-FMI), who have taken out a risk policy since October 2007, will be given the option to take up a new Business Person Elect policy including the enhancements.
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Question:
What is the definition of an eligible child?
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Answer:
To be eligible for cover, the child must be unmarried and:
- Under 21 years old, or
- Under 25 years old if the child is still a full-time student at a recognised institution, or
- Any age for as long as the member’s cover continues if the child has become mentally or totally and permanently disabled before age 21, or
- Under 19 if the child is financially dependent on the member and the member is the child’s guardian (and not their parent).
This may include a legally adopted child, a stepchild and an illegitimate child.
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Question:
What is the definition of an eligible spouse?
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Answer:
Definition of Spouse: A spouse may be any one of the following:
- married to you by law, tribal custom or under the beliefs of any Asian religion. If there is marriage under African traditions, it must be accepted by a tribal council. The tribal council is a person who the tribal chief recognises as a legal partner and who has written proof that lobola has been paid.
- a common-law spouse. A common law spouse is a person that we recognise as a spouse. To qualify as a spouse, a common law spouse must live with you for at least six months in a committed relationship akin to marriage.
A spouse may be of the same gender as you.
You must give all details of common law spouses to us at the date of commencement or within one month of the common law spouse becoming eligible for cover.
We will cover a maximum of one spouse.
Divorced spouses are not covered. Divorced spouses are people who do not fall under the above definition of a spouse anymore.
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Question:
When are these enhancements effective from?
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Answer:
Applications will be considered by FMI from the 21st June 2010.
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Question:
Should my client decide to utilise the Freeze period, what are the effects on my commission?
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Answer:
Annualised commission: FMI will not claw back any commission if your client utilises a freeze period. However if a policy lapses, a freeze period exercised on the policy may have an effect on the amount of commission clawed back, as a freeze period extends the term in which commission can be clawed back. Should further commission be generated during a freeze period you will only receive payment on commencement of premium payment, which commission may be pro rated.
Annualised monthly: You will not receive any commission during the freeze period. Payment of commission will recommence after the freeze period has ended and further premiums are received. FMI will not claw back any commission if you client utilises a freeze period. However if a policy lapses, a freeze period exercised on the policy may have an effect on the amount of commission clawed back, as a freeze period extends the term in which commission can be clawed back. Should further commission be generated during a freeze period you will only receive payment on commencement of premium payment, which commission may be pro rated.
As and when commission: You will not receive any commission during the freeze period. Payment of commission will recommence after the freeze period has ended and further premiums are received.
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Question:
Why has there been such a big rates reduction on the Permanent Income Protection (PIP) benefit?
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Answer:
Under the PIP benefit, you will see an average of a 25% reduction in rates. FMI went back to the drawing board, used our claiming and rates experience and managed to secure a significant rates reduction on PIP premiums. As such, we have passed this benefit onto our clients.
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