What makes group insurance unique?

What makes group insurance unique?

Last updated on 25th June, 2020 at 09:02 am

What exactly is group insurance, and how does it compare to individual insurance when planning financially for life’s curveballs? Read on to find out.

Group risk insurance benefits are designed to insure you and protect your family in the event of long-term illness or death while you are working for an organisation. They are non-wage compensations, which include employer-provided benefits for death, accident, illness or retirement, to ensure your ongoing financial wellbeing as an employee.

The cover is provided to employees who are under the normal retirement age (or benefit cessation age, if this applies), in the active service of the employer. The insurance is payable in the event of the death or disability of you as the member/employee, should the death or disability occur before the expiry of your normal retirement age.

The value of group insurance benefits

For your employer
Economy of scale makes group risk cover a cost-effective way to insure the business’s most important assets – its employees. Among other benefits, group risk cover would appeal to potential and current staff, leading to retention of talent.

For you as an employee

  • Group risk cover provides financial protection for you as an employee, as well as your family, against various insured events.
  • Thanks to economy of scale inherent to the structure of group insurance, you pay a competitive rate for this protection compared to individual insurance.
  • You can access insurance without the need to provide medical evidence, up to a certain monetary amount. This is known as the medical proof free limit.

How does group insurance differ from individual insurance?

Individual insurance
When applying for insurance under an individual policy, you need to provide satisfactory medical evidence of good health to your chosen insurer before any cover can be granted.

Group risk insurance
This cover is granted up to a certain monetary amount (medical proof free limit) for all qualifying members of a group scheme.

Sanlam Group Risk provides each group scheme with a medical proof free limit, so that every employee on the scheme whose group risk cover is below this limit does not need to provide any medical evidence of good health in order to be insured.

But what if I’m required to provide medical evidence to qualify for full group risk cover as an employee?

When your potential group risk cover exceeds the medical proof free limit, you first need to provide medical evidence of good health before you can enjoy the balance of cover that exceeds the medical proof free limit.

Experience shows that more than 50% of employees whose cover exceeds the medical proof free limit do not submit to medical testing. In such cases, the employee’s group cover is limited to the medical proof free limit as stipulated by the scheme.

For accident-related claims, Sanlam’s Accident Booster benefit pays an additional benefit up to the potential cover when an employee’s Group Life, Lump Sum Disability or Income Disability insurance benefit has been restricted to the medical proof free limit as a result of failure to provide satisfactory medical evidence of good health.

This means that the assessment of whether you, as an employee, qualify for your full potential cover, based on medical evidence, does not restrict the claim amount in the case of a claim if the claim resulted from an accident. The claim for a death or disability benefit should, however, be submitted within six months of the accident taking place (specific place and point in time).

An accident is defined as an unforeseen life event that cannot be attributed to an illness or disease.  Suicide and self-inflicted injuries are, therefore, excluded (other exclusions concerning an unexpected event are listed in your group risk policy).

As a Reality Access for Sanlam Group Risk member, you enjoy free 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 more about your benefits here.

How will the current COVID-19 pandemic impact my group risk cover?

Visit our website for responses to Frequently Asked Questions from our members.


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