Dear (FA First name) (FA Surname)

Have you read Momentum’s Myriad direct comparison with FMI’s Business Person Elect and Professional Elect?

 As the experts in income protection for 13 years, FMI welcomes the attention on income protection and agrees on the critical importance of this type of cover. For over a decade, it has been FMI’s vision to provide income protection to self employed small business owners. In the context of the comparison we would like to bring your  attention to certain misleading points which will help you provide the best advice to your clients.

 

Below are a few reasons why FMI is still a market leader in income protection:

As the responsible choice for your client, FMI welcomes your feedback.

Please contact our Financial Advisor Distribution team on 0860 10 52 08 or email sales@fmi.co.za

For a printable version of the above, please contact marketing@fmi.co.za

 

FMI Ltd is an Authorised Financial Services Provider FSP 2717

FMI’s income protection benefits are classified as “sickness benefits”.

FMI has always

positioned itself as a temporary

disability expert with disability income protection products. FMI assess disability claims based on the client’s ability to perform his/her occupation. As a result our claims are inclusive of: critical illness, functional impairment, fracture and hospitalisation.

“FMI virtually excludes back and mental disorders altogether with their very limited payout periods.”

 

“FMI has the most onerous exclusions in the market. It is important that financial advisors discuss FMI’s exclusions with clients, so as to avoid advice risk.”

FMI do not exclude back related claims. Currently we have 26 temporary income protection (TIP) back claims in progress, including 4 permanent income protection (PIP) claims.

 

Additionally, FMI has no exclusions on mental health, but rather it is termed a limited benefit, with a restriction on period of payment. To date we have paid 120 depression TIP claims in total.

“If FMI deems a client partially disabled, a partial benefit is paid.”

 

The level of benefit does not always equal the level of disability.

 

In practice, the client’s partial disability often results in an inability to perform their occupation. In this case the level of payout would be higher than the level of disability. FMI’s unique claims philosophy therefore caters for claims with a high loss of income but with a low severity of disability.

“Proof of pre-disability earnings is required if the client is claiming for loss of income.”

In practice FMI very rarely request proof of earnings at claims stage. The policy wording does however state that we may request such proof. The reason for this is to protect the insurer in the event of a fraudulent claim.

“FMI does not define the income that can be covered.”

 

“FMI does not specifically exclude overhead expenses but only covers a certain list…”

FMI covers both gross taxable income and cost to company. In addition, both personal income and business overhead expenses are separated into two benefits, to provide additional cover and clarity. Our TIP benefit covers 100% of personal taxable income and BOP benefit covers 100% of business overhead expenses.

“FMI’s one month waiting period does not pay retrospectively from day one.”

 

FMI currently offers 3 waiting periods and 3 benefits terms which results in 9 possible options. This gives the client the flexibility he/she needs.

 

FMI elected not to make its 1 month waiting period option retrospective. FMI’s claims experience showed a negligible price differential between that and the 7 day retrospective option.

 

All 3 waiting periods are available to all occupations.

FMI vs Myriad case study

FMI were unable to confirm the accuracy of the case study because Momentum failed to disclose critical pricing assumptions such as: retirement age; benefit and claims escalations; occupational class;

products used and

smoker status.