Your clients’ income today pays for their plans tomorrow

Brad Toerien, CEO of FMI.

Your clients have dreams for the future… whether it’s that once in a lifetime holiday or planning for their retirement, they want the comfort, security and independence that comes from knowing they are adequately providing for themselves and their spouse. To ensure their dreams become a reality, they need a carefully structured investment plan.

But, what would happen if they got sick or injured and couldn’t earn an income – even for just a few weeks? Often, insurance to protect a client’s monthly income stream is overlooked. Not only is it imperative that your clients cover themselves and their families from the immediate effects of not earning an income, but a break in their income could also have an enormous impact on their future plans.

How would they pay their monthly investment or RA contributions? They may be forced to stop payments, incurring penalties and fees as a result. And how would your clients continue to pay for their monthly living expenses? They would have to borrow money or access their savings.

Take FMI policyholder, Allan Swanepoel, for example. He started Suntropica Farms with a business partner fifteen years ago. They started small but today their company is a major culinary herb supplier to large retailers nationwide. Over the years Allan has had to undergo several surgeries including a back fusion, two knee operations, a hip replacement and ankle fusion. Because of his cover with FMI, he has always had the peace of mind that he was covered during these periods of recuperation, which ensured he never had to worry about being able to afford his monthly expenses and investment contributions.

That’s because Allan’s policy with FMI provides a combination of monthly income and lump sum benefits in the event of temporary or long-term disability, critical illness or death. Our income benefits are ideally suited to meet Allan’s ongoing monthly expenses like groceries, electricity and investment contributions. And the lump sum benefits are perfect to allow for any once off costs like additional hospital bills or paying off debt.

Traditional life insurance benefits have been predominantly lump sum based, which ignores the fact that what you are really trying to protect is your client’s income stream. This approach has a negative impact on investment planning for many reasons. Lump sum benefits typically only protect against permanent disabilities, and yet most injuries and illnesses are temporary. If Allan’s policy didn’t include an income benefit, only one of his seven claims could have potentially been paid. In addition, it’s far easier to work out the cover your client needs when using a combination of income and lump sum benefits because the income is directly related to your client’s current monthly earnings and the lump sum to the amount of debt they are servicing.

Allan’s case is not the exception. Seven out of ten people will have at least one injury or illness in their working lives that will prevent them from earning their salary. What’s more is that people are three times more likely to claim again, after their first claim. As you can see from Allan’s experience, multiple claims are a reality, so it’s critical that your clients have the right cover in place that will protect their income and their investment savings.