When your Wealth Bonus unlocks, here are your options

Last updated on 20th February, 2024 at 03:25 pm

Sanlam is serious about helping clients to stay on track with their financial plan, and Wealth Bonus®, the Sanlam Group’s long-term loyalty benefit, rewards clients for doing just that.

So how does it work, which products automatically earn Wealth Bonus®, and what are some uses for the monetary Wealth Bonus® once it unlocks?

How Wealth Bonus® works

When you invest in yourself by consistently maintaining contributions or premiums on participating Wealth Bonus® products in your portfolio, Sanlam invests in you – through Wealth Bonus®.

Depending on the product you have with Sanlam, every time you make a smart financial choice (eg pay your Life Insurance premium, contribute to your Sanlam Retirement Plan, swipe your Sanlam Money Saver Credit Card), Sanlam matches a percentage of that amount and invests it in an interest-bearing account: your Wealth Bonus® account.

The longer you stay true to your financial plan, the more your Wealth Bonus® pot grows.

With your Life Insurance product, you earn Wealth Bonus® with every premium paid and a percentage of your accumulated Wealth Bonus® unlocks at certain intervals before the full balance can unlock at age 70. If you stay invested, your Wealth Bonus® enjoys compounded growth at a market-related interest rate, meaning a greater sum unlocking later in life.

And the added tax benefit on Life Insurance with Wealth Bonus®? When you get your Wealth Bonus®, it’s tax-free.

Which products help you earn Wealth Bonus®?

You can earn Wealth Bonus® by adding Wealth Bonus® participating products to your Sanlam portfolio.

These include:

• Sanlam Life Insurance
• Sanlam Disability Cover
• Sanlam Income Protection
• Sanlam Severe Illness Cover
• Sanlam Funeral Cover
• Sanlam Money Saver Credit Card
• Sanlam Retirement Plan
• Sanlam Personal Loan

How Wealth Bonus® stands out

“Sanlam invests in your future by rewarding you with a monetary cash back, which is unique in an industry where rewards a client can enjoy are often limited to short-term lifestyle benefits,” says Nathea Nicolay, Head: Product at Sanlam Loyalty & Rewards.

With Wealth Bonus®, clients can enjoy both immediate and long-term benefits for keeping their products up to date. Any client with a Wealth Bonus® participating product has access to 13 or more Wealth Bonus® Lifestyle benefits at no extra cost to them.

What’s possible with Wealth Bonus®?

Meet Lebo*.

She’s 30 years old, and has a Sanlam Life Insurance policy – a product with a built-in Wealth Bonus® – with a monthly premium of around R1 700.

At age 50, Lebo’s Wealth Bonus® is roughly R1.49 million, provided she has not withdrawn her unlocked Wealth Bonus®.

At this stage, R160 000 of her Wealth Bonus® will unlock as will be available to her to withdraw.

If Lebo withdraws this amount, she can use it for a number of purposes: to help settle her bond, or perhaps pay her child’s tuition fees.

Nicki Blignaut, senior financial planner at 2one2 BlueStar, authorised by Sanlam, says that while it’s ideal to keep your Wealth Bonus® invested, there are scenarios in which using it in other ways can make sense. “Paying off debt helps you invest in your future,” she says.

Nicolay adds that in the high interest rate climate, a reduction in debt is an investment in one’s financial wellness.

While Wealth Bonus® grows in a market-related interest-bearing account, if Lebo chooses to withdraw to invest, she could consider a unit trust, or a money market account on a platform like EasyEquities, partly owned by Sanlam, too.

Leaving her Wealth Bonus® untouched for another 20 years means an even bigger Wealth Bonus® can unlock once Lebo turns 70.

At age 70, Lebo’s Wealth Bonus® fully unlocks: R10.1 million+

When a Wealth Bonus® of this value unlocks, Blignaut says investing it to withdraw an income could be an option. Lebo could discuss with her financial planner the option of investing in a moderate-risk investment plan.

“I’m an advocate for Wealth Bonus® as a supplement for retirement, because people simply cannot afford to retire in this country, and because it’s a tax-free lump sum,” says Blignaut.

Yes, it’s worth it

The benefits of sticking to your financial plan are clear, and so are the rewards Sanlam promises clients for taking care of their financial wellbeing.

“There’s R6 billion* of accrued Wealth Bonus® that’s already put aside for clients to pay out as long-term loyalty benefits,” shares Nicolay.

Motivation to stick to your financial plan, indeed!

* Lebo is not a real person. We have used her scenario to illustrate the benefits and potential uses of Wealth Bonus® when it unlocks.

**Correct at time of publication

Want to maximise your Wealth Bonus®? Read seven easy ways to do just that, here. A smart first step is to meet with a qualified financial planner to ensure you have a comprehensive financial plan in place. Book a meeting with one today.