Articles for individuals/families

Protecting your ability to earn an income

How long could you survive without an income? What would the consequences be to you and all those who depend on you?

“These are the questions that every breadwinner in each household across South Africa and anyone earning an income needs to ask,” says FMI CEO Brad Toerien.

“We want people to see life insurance with fresh eyes. It is not only about protecting what you have today, it is about protecting your plans for the future – the life you have not yet lived,” explains Toerien. “This starts with protecting your greatest asset – your ability to earn an income. We believe that the best way to secure your future income stream against the risks of injury, illness or death is with a benefit that pays you a monthly income – one that exactly matches the income stream you are trying to replace,” advises the FMI CEO, who is all too aware of the immense impact a lump sum can make however cautions that lump sums are at their most effective in tandem with recurrent pay-outs.

“Our long-term goal is to make income protection available to everyone, no matter what you do for a living and for as long as you continue to earn an income” notes Toerien, whose organisation debuted on the insurance market as Income Protection Specialists, back in 1995. To this end, having pioneered Income Protection for entrepreneurs, FMI launched their event-based range of benefits two years ago, which made this cover available to more than 250 occupations for the first time. In addition, they were the first product provider to offer income protection up to the age of 75 – a valuable feature in a world where people are living and working for longer than ever before.

“We began by specialising in Income Protection and that focus allowed us to continually develop and improve our offering. However, over time we realised that our philosophy could be extended to Critical Illness and Life benefits as well and we gradually expanded our offering to include the full suite of life insurance products.”

For example, inspired by the story of a close family friend who developed breast cancer, Toerien and his organisation embarked on research that ultimately culminated in FMI’s Critical Illness solution, introduced last year.

When you have been immobilised through a serious injury or illness, the trauma envelops your dependents as well, never mind the dreadful prospect of your income drying up. “We found that all the people we spoke to had similar stories to tell – the impact of a critical illness was more than just financial. It affects the mind, the body and the soul and it affects the entire family,” notes Toerien. “True to our philosophy, we developed a unique solution that offered a combination of income and lump sum benefits. In addition, informed by our research, we introduced the two further benefits, both of which we decided to include free of charge,” he added, mentioning FMI’s suite of ‘assist benefits’ in place to aid clients and their loved ones.

“As an industry, we need to address perceptions that life insurance is complex and expensive and that when you need it most, you have to fight to have your claim paid. Most importantly, we have a responsibility to connect with our customers and make insurance relevant,” explains Toerien, who highlights the twin problems of South Africans with high levels of indebtedness and who are dangerously under-insured.

“That’s what we hope to achieve with our #21Lives campaign. In celebration of our 21st birthday, we set out on a journey across the country to capture the stories of 21 inspiring policyholders who we’ve paid claims to over the years. Ordinary people, with exceptional stories, who despite their curve ball in life, were still able to go on to do extra-ordinary things. These stories highlight the need for protection and the valuable role of the adviser in the process.”

“We believe that everyone is busy writing their story – our role is to come alongside you and step in if bad things happen so that you are able to continue to write the rest of your story,” emphasises Toerien, adding that the campaign seeks to humanise insurance. “Our hope is that these stories will help to ignite a change in the way people think about life insurance.”

FMI is a division of Bidvest Life (Published in Personal Finance 2 September 2017)