Important Reminder – Aggregation of Benefits

Disability insurance aims to replace lost future income for employees who, prior to normal retirement age, become disabled. The employee cannot, however, be financially enriched by this circumstance and this is where aggregation of benefits from all sources occurs.

At quote stage the insurers do apply the following maximum limits e.g. where Lump Sum Disability (LSDB) and Permanent Health Insurance (PHI) are selected on the same structure, to assist with limiting potential over-insurance.

  • Capital Alliance – Can quote PHI & LSDB together but with a maximum LSDB of R 1,000,000.
  • Hollard – Will consider quotes on a case by case basis and with a maximum LSDB of 1 x annual salary only.
  • Old Mutual – Do not offer LSDB & PHI together.
  • Sanlam – Can quote PHI & LSDB together with a maximum LSDB of 2.5 x annual salary. (Trauma or Critical Illness cover is also subject to aggregation of benefits from all sources).

At claim stage, the insurers request disclosure of all the member’s policies so this is useful information to be aware of when discussing benefit structure options with your clients.

Thank you and regards,
The TSA Team

You’ll find all back issues of TSA Connect by visiting our blog.

All information provided is intended to inform and explain, but please remember to always check the current terms on policies when considering options and advising clients.

(Vol 7. Issue 7)

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