Often confused, both Capital Disability and Income Protection are vastly different with each offering pros and cons.

To find out more about FMI’s income protection products, please contact our FA Distribution Team on 0860 10 52 08 or email us at sales@fmi.co.za. To remove your name from our mailing list, please email unsubscribe@fmi.co.za Questions or comments regarding this newsletter? Email us at marketing@fmi.co.za.

FINANCIAL ADVISOR NEWS        

Income Protection vs Capital Disability

 

· Income Protection (IP) offers a monthly replacement of your income in the event of you being unable to work, permanently or temporarily.

· As IP provides a monthly income, you can carry on a normal life with uninterrupted income. You can select a cover amount which will be paid until you become fit to work again or have reached retirement age and are entitled to receive a pension.

· FMI’s IP offers you the choice of 3 different waiting periods, varying between 7 days to 3 months, which  applies before any income payment will begin. 

· IP for staff can help a company’s bottom line by providing towards costs associated with employee absence.

· IP can provide toward a regular income to affected staff without having to dip into profits.

· The income received can add towards the loss of contribution by the incapacitation of the employee to revenue generated.

· IP can contribute towards the cost of a replacement of a sick or disabled employee.

· IP is especially relevant for Business Owners who need to maintain a continuous cash flow to pay for ongoing expenses while he/she are incapacitated. This income will help to keep the business alive.

 

 

 

Essentially, Income Protection offers a monthly payout if unable to work with a chosen waiting period while Capital Disability provides a once off lump sum payment, generally after a longer waiting period and only if permanently disabled. However, these two benefits may be structured in tandem to ensure that a certain type of lifestyle is maintained.

 

Its up to you, as a Financial Advisor to ensure that your clients are financially secure if a disability or illness had to strike.

 

* Please note that the Income Protection described in the above text is based on FMI’s Income Protection product and the Capital Disability is based on industry generalisation. ** A thorough Financial Needs Analysis should always be conducted with a client in accordance with FAIS.

FMI Ltd is an Authorised Financial Services Provider FSP 2717
Text Box: Important Notice FMI are initiating telephonic underwriting in order to save both yourself, the Financial Advisor and your clients, the time of having to complete the underwriting paper medical questionnaires. This process should be in full implementation by the end of June 2008. Conversations will be recorded for the legal protection of both parties involved and will form the basis of the insurance contract.

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*Terms and Conditions apply

 

 

· Capital Disability pays out as a lump sum and as a percentage of the sum assured based on the severity of the condition.

· Being a lump sum, you must invest this capital amount to provide yourself with an income for the rest of your life. 

· A Capital Disability payout is made at the end of a waiting period after you become disabled, where by you will have to make a plan in the interim for financial income.

· Capital Disability is an alternative, cheaper form of providing for disability, but only in the case of total and permanent disability.

        VOLUME 17, MAY 2008