How else would your client survive?

FMI is an authorized Financial Services Provider FSP 2717

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New appointments to the FMI team

 

FMI is pleased to announce two new appointments to our team.

 

Lee-Anne Ibbetson with over 21 years in underwriting experience, joins us as FMI’s Head of Underwriting. Maarten van de Vijver is welcomed as FMI’s Head of National Financial Adviser Distribution, having worked for several of SA top 5 Life Assurers for the last 20 years.

 

We look forward to having both these individuals on our team!

Would your self employed clients survive financially if they were unable to run their business?

 

Would their business survive?

 

Would they rely on the State disability grant? In South Africa the State pays out a maximum of R1,010 per month to those who are disabled.

 

Would they be able to rely on past savings? If they saved 5% of their income each year, a 6 month disability would wipe out 10 years of savings.

 

Traditional forms of insurance such as dread disease or critical illness cover is aimed at providing the life assured with lump sum cover against the cost of surviving a dread disease. This cover was designed to offset the financial costs associated with certain specified medical conditions. Similarly, capital disability pays out a lump sum in proportion to the severity of a covered condition. Income protection differs substantially in that it provides a monthly payout when the life assured is unable to work due to an accident or illness.

 

Each of the forms of insurance mentioned above has its own specific merits and uses, the question that arises however is “Which is the most beneficial for small business owners?”

 

The lump sum received from a capital disability or dread disease payout can contribute towards the additional medical costs associated with the treatment of the disease or disability, adaptation of home facilities, private nursing and early retirement. However certain additional costs associated with the disability or disease are not included in the lump sum payout such as the risk of not being able to work the same hours as before, the loss of potential income or even not being able to work at all. Most importantly, key criteria need to be met in order to be considered for a valid dread disease or capital disability payout.

 

The monthly payments of Income Protection cover can provide towards the gross income of the business owner, the running costs of a business, the cost of a replacement of an incapacitated employee or towards their salary without having to dip into the profits of the company. Income protection is especially relevant for small business owners who need to maintain a continuous cash flow to pay for ongoing expenses while partially or totally incapacitated. These monthly and regular payments can help to ensure the survival of a small business.

 

When we look at all 3 types of insurance holistically, each should work in conjunction with the other to ensure a certain type of lifestyle is maintained should an illness or disability strike. Being in the market for over 14 years, FMI recognises the fact that one of the greatest tests of any insurance company is its claims certainty. Our claiming philosophy has been conceptualised with transparency and simplicity to support clients at a time when they need it most.

 

For more information please contact FMI on tel 0860 10 52 08, email sales@fmi.co.za or visit www.fmi.co.za.

What are your chances?

 

Past experience shows that there is a greater chance that you will survive a major illness and that the likelihood of contracting a dread disease increases proportionately with age.

FINANCIAL ADVISER NEWS         Volume 33, September 2009