Life and disability benefits: are you suitably covered?

Sandy Govender, Head of Group Insurance at Momentum.

Many employees belong to a group company scheme that provides them with life and disability cover, yet remain unaware of the benefits that they are due and as such do not claim these benefits even when they are entitled to them. Added to this, many employees are also unaware of how their cover works, for example whether their cover continues when they are absent from work because they are taking part in a strike, or even if they are retrenched.

Sandy Govender, Head of Group Insurance at Momentum, talks us through the ins and outs of life and disability cover within the framework of group company schemes and how you can cover your bases by ensuring that you are always in the know.

Do you know your benefits?

“The kinds of benefits that could be included in a group company scheme differ from firm to firm,” says Govender. “These benefits could include cover for life insurance, different types of disabilities, critical illness, education benefits to cover a child’s schooling in the event that his or her parents die, and funeral cover, among others.”

Govender explains that how much you are covered for also differs from scheme to scheme and by benefit type. “It might be a multiple of salary for life cover or a percentage of salary for disability cover or a fixed amount for funeral cover. The level of cover is in most instances decided by the trustees of the scheme after receiving advice from their brokers. Where the benefit is linked to salary, the cover can be a fixed percentage or multiple of salary depending on the benefit type or in some instances – for example for life cover - the staff can choose the multiple up to a maximum multiple of salary.”

Some companies communicate the benefits and terms and conditions of the cover to staff. “Where this information is not provided it can be obtained from their HR department,” says Govender. “It is important that each employee takes ownership of the information in their policies and that they read the fine print so that they know exactly what and how much they are covered for so that in the event of needing to claim, there won’t be any nasty surprises in the form of a rejected claim.”

What about when I am not at work?

There is also the question of whether employees are still entitled to claim from their group company scheme in terms of life and disability cover – and to what extent – if they are dismissed or retrenched, resign or go on strike.

“In all the above-listed cases, the client will only be covered if the date of the death or disability occurred while they were in employment,” says Govender. “This is because they would have paid a premium up to date. However, most schemes offer a continuation option – in other words, the client can continue the policy after leaving the employment of the current employer. In this instance they will be covered in the event of death or disability provided they continue to pay their premiums.

Clients are notified about this option to continue their cover, where it exists, as part of their termination process when filling our termination documents.”

Govender notes that employees should be aware of this and be sure to fill out the necessary paperwork before they leave their current employment to ensure that there are no gaps in their cover.