What happens to your group risk benefits if you leave your employer

Last updated on 21st February, 2022 at 05:11 pm

Group risk benefits offer an affordable way for employees to be covered for unexpected situations at an affordable rate. But it’s important to know what happens to this cover when you leave your employer.

When you as an employee leave the services of your employer, all your group insurance ceases. This is because the group policy providing the group risk benefits is between Sanlam Corporate: Group Risk (SGR) and the fund and/or employer.

The good news is that Sanlam offers a conversion option to accommodate employees who’d like to convert their group cover into individual insurance. This option applies to life insurance benefits (own life or spouse), disability insurance (lump sum or monthly payments) and severe or critical illness insurance benefits.

Group life, disability, severe illness or critical illness insurance policy members

If your fund or employer’s policy has a conversion option to accommodate your wish to convert and continue your group cover on an individual basis:

• The conversion option is valid for 60 days from the date of withdrawal/exit from a fund/employer. This means that if you would like to use this option, you will need to apply for it within 60 days of termination of employment by advising Sanlam of your intention to convert, and submitting relevant documentation within that period.
• The individual cover amount is limited to, or may be less than, the group cover you had under the Sanlam group risk policy.
• You don’t have to provide medical evidence of good health/insurability (eg assessment of your health condition via physical screening or medical exam), an HIV test or cotinine test for non-smokers, if the same level of group cover (or less) is converted. Sanlam may, however, ask for information to establish the rating factor or premium rates. For example, they may call for a body mass index (BMI) measurement, to be completed by a nurse, in addition to information about hazardous activities you may participate in.

Converting group life, disability, severe or critical illness insurance

You can obtain an official quote from Sanlam for the conversion by providing the following information:

• your ID number;
• your last day of employment (ie confirmation of exit date); and
• your reason for leaving your employer’s service (resignation, retirement, retrenchment etc).

The converted cover and premium (ie confirmed individual-based premium) will be subject to the conditions applicable to Sanlam Life Insurance Limited policies.  Sanlam Life Insurance Limited is a Licenced Financial Services Provider.

Group funeral insurance policy members

Exit Cover allows you as an individual employee who enjoys group funeral cover via Sanlam Group Risk (SGR), to continue this group funeral cover in your own capacity under a funeral policy with Sanlam Developing Markets (SDM) when exiting from your employer’s group funeral scheme, ie when employment is terminated due to retirement, resignation or retrenchment.

This means that if you had been a member of the group funeral scheme for at least six months before withdrawal, you can continue funeral insurance for yourself, your spouse and children and extended family members (if applicable), as a new Exit Cover funeral policy with Sanlam Developing Markets Limited (SDM), on the condition that SDM receives the instruction within 31 days after your date of withdrawal from service.

The cover will not be subject to a waiting period, as SDM waives the six-month waiting period for the new Exit Cover funeral policy (providing similar benefits), on the following conditions:

• You, the employee, can prove you had a previous funeral policy with an insurer within 31 days preceding the inception of the new funeral policy; and
• The Exit Cover amount that can be continued is limited to the group funeral insurance amount under the previous funeral policy.

How do I access Exit Cover?

You, as the insured member, can only use the Exit Cover option if you are a South African citizen or permanent resident (ie holder of a RSA ID document) and are not a contract worker. For more information, please refer the application process.

The insurance will be subject to the terms and conditions applicable to SDM policies. Sanlam Developing Markets Limited is a registered long-term insurer and Licensed Financial Services Provider.

As a Reality Access for Sanlam Group Risk member, you enjoy benefits including 24-hour expert legal help and trauma assistance on the phone, monthly discount coupons to make your money go further and 24/7 emergency medical support.  Find out more about your benefits here.