Lump sum disability

Lump Sum Disability

Lump Sum Disability cover pays out if you cannot work because of an injury or illness. You can use the payout to replace your lost income.This benefit pays a lump sum if an employee or their spouse becomes medically impaired and unlikely to earn an income. This medical impairment may be permanent or temporary.

This page has the following sections:

1. How your claim is assessed
2. Benefits available in an Lump Sum Disability
3. Real life examples of how clients have benefited from Lump Sum Disability Benefit
4. Who should consider an Lump Sum Disability Benefit
5. General terms and conditions of Lump Sum Disability Benefit

How your claim is assessed

Depending on the benefit option you choose, your claim can be assessed on the following criteria:

- Total disability Your disability will be evaluated according to objective medical criteria or Activities of Daily Living

- Partial disability Your disability will be evaluated according to objective medical criteria or Activities of Daily Living

- Loss of income Receive a percentage of your insured amount while the Insurer establishes the permanence of your disability

- Nominated Occupation Receive your insured amount if you are permanently unable to perform your nominated occupation

Your claim will be usually paid out once it meets the qualifying criteria of your Insurer

Discovery explains Capital Disability Lump Sum Benefit works in the video below.

Benefit options

The LifeTime Capital Disability Lump-sum
Benefit

Dynamic cover that adjusts to reflect any loss in future earnings relevant to your specific disability, and your expected future salary growth. By objectively assessing the impact your disability may have on your future income, we can boost your
Capital Disability Benefit payout by up to 200%.

Expiry age

You can choose to have your policy cover you up to age 60, 65, 70 or for whole of life. With the Whole of Life option, a new set of tailored medical criteria will be used after age 70.

Waiting period

The market standard is generally a six-month waiting period before a disability claim will be paid. To wait six months before receiving a payout may cause significant financial difficulty if the life assured has home loan repayments or other debt and if their income disability benefit is not enough to cover all expenses.

Discovery Life has no general waiting period to qualify for a claim. In certain cases, the medical criteria specify how long a life assured must have had a condition for a specific period to establish its permanency. Any treatment before the claim would count towards the period.

In contrast, waiting periods only start when a claim is submitted.

Upfront Lump-sum disability payout

If you qualify for a Category A disability claim you can receive an upfront lump-sum payment of up to 36 times your Income Continuation Benefit amount, based on the LifeTime Impact of the disability. This payment is over and above your regular monthly benefit payments.

Contribution Protector

The Contribution Protector covers your premiums for your other Discovery products at 100% for up to 24 months on
the Comprehensive option, or 25% for up to 12 months on the Core option, on temporary disability. Discovery Life will
pay out the same amounts on retrenchment or liquidation of your business (if you are a business owner), for up to six months.

Increase cover without underwriting

Increase your cover without underwriting every three years by 20%, subject to a negative HIV test, with the Guaranteed
Insurability Benefit. This is particularly valuable if you expect your income to grow faster than inflation.

The Spouse Capital Disability BenefitBooster

Covers your spouse by providing an additional
40% for Capital Disability Benefit Category A, B and
D (if applicable) events at no extra premium, based
on how your policy is structured

Temporary Income Continuation Benefit

You can increase your insured amount during the first two years of becoming disabled or severely ill, to up to 100%
of your monthly income (after tax) by selecting the Temporary Income Continuation Benefit.

Family protector

With the Family Protector, we will pay 100% of your insured amount for up to six
months if your spouse or child suffers a severe illness (Severity A or B), or 100% of your insured amount for one month if your spouse passes away.

Business owner

As a business owner, Choose the Overhead Expenses Benefit and enjoy
monthly funding for your business expenses while you are disabled.
Product features include:
- The option to choose between a seven- day and one-month waiting period. Similar to the Income Continuation
Benefit, payments may be backdated to day one.

- Benefits will be payable for up to 24 months, or until the benefit expiry age
of 60, 65 or 70 is reached, whichever is sooner.

- With the Automatic Sickness Underpin, you will not need to prove that your share
of qualifying overhead expenses are not being met by any income you still receive.

Retrospective payout

If you select a seven- day waiting period, you may get backdated payments from day one if you suffer from an injury or illness that qualifies for retrospective
payments. Similarly, certain professionals in private practice or partnership may also qualify for backdated payments on the one-month waiting period.

Protection of key living
expenses

You can qualify for Discovery Card partner discounts of up to 50%*if you become permanently disabled and you are
on the Classic Life Plan.

How clients have benefited from an Income Continuation Benefit

Further information on Income Protection policy

Tax consideration

Your disability lump premiums are not tax deductible. In the event of a claim, the money you receive is tax free.

Regulatory protection

Life insurance companies in South Africa are regulated by the Financial Services Board. South Africa enjoys excellent financial services regulations and supervision, giving you the confidence that a life insurance company will pay according to the insurance contract you have signed up.

Medical underwriting

Underwriting is the process used by a life insurance company to assess your risk factors. When you apply for an Income Protection benefit, the life insurance company will do medical tests on you. If you are not healthy, the life insurance company may increase the premium it will charge you, decline certain benefits, or decline your application.

General exclusions

Life insurance companies will not pay Lump Sum disability claims on most of the following reasons:
- Participation in hazardous pursuits and/or risky activities
- Self-inflicted injuries
- War, civil commotion, riot, terrorist activity or rebellion
- Radioactivity or nuclear explosion
- Violation of criminal law by the life covered.
- Pre-existing conditions for conditions the member suffered in the 6 month
period before joining the scheme and for which the member claims in the
first year of membership.

More info on general exclusions:
Exclusion grid summary 2014 (courtesy Wealth Associates)
Exclusion grid 2007 (courtesy National Financial Partners)

Who should consider investing in an Income Protection benefit?

You should invest in a Lump Sum disability if:

- You are a professional working in a salaried job
- Your are a professional in private practice or partnership
- You are a business owner.
- You want to insure your ability to earn an income. This is where a disability benefit will help you financially when you become disabled and unable to work.

How much LUMP SUM DISABILITY cover should I have?

You should consider:

- When choosing your level of cover you should consider any outstanding debt and other liabilities that you would have to
settle if you were to become disabled.
- To give you continued peace of mind at your benefit expiry age, if you have not claimed, your Capital Disability Benefit will automatically convert to the Severe Illness Benefit (Severity A and B).

What is the minimum premium?

The minimum premium is about R100 per month. So an Lump Sum benefit is affordable.

What if I don't pay my premium?

If you miss a premium payment, the life insurance company will try to debit your account again later in the month, or debit this month and next month's premiums next month. If you miss the premium payment again next month, the life insurance company will debit 3 months' premiums the following month. If the debit order is again unsuccessful, the life insurance company will have no choice but to terminate your policy.

After your policy is terminated, for a limited period of time, the life insurance company will allow you to reinstate your policy if you manually pay all the outstanding premiums into the insurance company's bank account, provide the proof of payment and complete a satisfactory declaration of health form.

Our product providers

As an independent financial planning practice, we have contracts with the following product providers in order to offer you a product that suits your needs:

Discovery, Hollard, Liberty, Momentum, Old Mutual, Sanlam, PPS

Our preferred providers

We have done the necessary due diligence in selecting the following preferred provider:

Discovery

We select Discovery Life as our preferred provider for the following reasons:
1. Reputable financial services group
2. Financially sound
3. Innovative product features
4. Immediate upgrade to 100% of your pre-disability income if you become permanently disabled
5. Uses 5 Underpins to assess claim, to find ways to pay the client in need
6. Meet upfront expenses with lump-sum disability payment
7. Extends cover on family members through Family Protector
8. Contribution waiver through Contribution Protector
9. Clever use of technology to provide excellent client service
10. Class leading travelling nurse service
11. Fast, fair claims

More info: Discovery Life Overview Brochure