Too many employees missing out on benefits of continuing their cover

Too many South Africans are missing out on the cost savings and advantages of continuing the death and disability benefits they enjoyed under their group scheme after they leave their employer.

Alison Ferraris, Head of Professional Wealth at Alexander Forbes Life, said that many group schemes offer continuation options which allow individual employees to continue their life and/or disability benefits as an individual life policy in instances such as resignation, retirement, becoming self employed or retrenchment.

“The individual will take over the premium payment responsibilities and keep the same amount of cover as when they were employed at a competitive cost.”

Ferraris noted that it was particularly beneficial for those people who have been with an employer for a long time, as their coverage was assessed when they were younger and possibly in better health.

“They will be able to continue their cover as an individual policy without providing further health evidence – barring an HIV test.

“If they don’t exercise the option, they may experience difficulty in securing cover on an individual basis and the cover may be substantially more expensive if health loadings or benefit exclusions are applied.”

Ferraris also recommends the people should review their insurance needs on a regular basis especially when changing employer as their insurance needs may have changed.

“They will need to evaluate whether they need to replace their group benefit coverage as the new benefits offered by their new employer may differ or may be restricted in terms of any health issues.

“If they are becoming self-employed or retiring they will no longer enjoy any employee benefits. The continuation option rates are normally competitively priced and it is an easy way to increase the personal coverage with only a HIV test.”

Anyone applying for continuation cover normally has a specific window period on leaving their job to exercise the continuation option.

“What we have found is that many employees leaving a company aren’t even aware that it could be an option for them.

“To ensure continued peace of mind when changing jobs we urge all employees to find out if they are eligible to apply for a continuation option.” Ferraris added.