A combination of a lump sum benefit and a monthly income benefit –
Life cover and Death Income
Funeral benefit automatically include on Life cover:
Insured – accelerating insured amount
And the spouse to age 65 – not accelerating the Life cover amount
And a max of 4 children – age 21 / 25 next birthday, also not accelerating the Life cover amount
Why do you need personal Life cover?
· To pay final expenses
· To pay off estate taxes
· To cover child expenses
· To replace the spouses income
· To pay off debts
Make sure your dependents can afford the life you always planned for them even if you’re no longer around!
Cover for your family’s future:
When it comes to life insurance, it’s not so much about what’s in it for you but what’s in it for the people you love and who depend on you financially. Of course nobody likes to think about their own death but it is necessary if you’re going to put a plan in place that ensures the financial future of the people you leave behind.
Life Cover will help your beneficiaries with the immediate expenses they face following your death, but what about the months or even years after that? That’s where Death Income fits in.
· Makes monthly payments to your family to help them cope financially without you
· Helps to cover day-to-day expenses like groceries and school fees
· The amount of cover you can get is tailored to your family’s financial needs
· Use it as part of a divorce settlement
How does the 2 benefits work together?
Cover all your bases with the right combination!
Our Life Cover and Death Income benefits are great by themselves but they also work well together:
Death Income pays monthly which means that they’ll continue to be taken care of in the months or even years after you’re gone
- Death of the life insured
- The Basic Death Income benefit, if selected, will pay out for a 12- or 24-month period on the death of the life insured. The 12- or 24-month Death Income benefits are available for business and personal puposes.
- In addition, the Extended Death income benefit can also be purchased and will pay out the selected benefit amount to the nominated beneficiary until the deceased’s selected expiry age, following a 24-month waiting period. The Extended Death Income benefit is not available for business purposes.
- Expiry age of 60, 65 or 70.
Can Death Income be used for Business insurance?
· Keyperson – (7 times annual salary – e.g. 5 X Lump sum and 2 X Death Income)
· Key man Insurance policies are usually owned by the business and the aim is to compensate the business for losses incurred with the loss of a key income generator and facilitate business continuity.
Frequently asked question on Death Income:
1. Will Hollard at any time consider to capitalize the monthly income into a lump sum? (If the beneficiary request it?)
The only time that this will happen is if the beneficiary were to die. It would be commuted to a lump sum and paid into the estate.
2. What happens if the beneficiaries pass away and there is still income that needs to be paid? (I understand it will form part of his/her will, but is estate duty payable?)
Refer above. There is always an estate duty payable. It is calculated on the lump sum value at the time of the life assured’s death. It’s important to remember this as there should be enough cover to cover this amount.
3. Do I understand it correct that there will be no income tax, no capital gains tax and no estate duty when the benefit is between spouses?
4. Will we always commute to a lump sum when the beneficiary past away or are there instances where we can pay the monthly income to the beneficiaries, beneficiary? E.g. A client wante to take out Death Income on his own life. He wants to state in his will that his father must inherit the death income and if his father passes away while receiving this income he wants his mother to receive the further monthly death income benefit. They don’t want to capitalise it to a lump sum.
It can’t be carried over so will always be commuted to a lump sum on the death of the beneficiary. The reason for this is that the policy was sold for a certain need.