More and more clients are asking about retrenchment protection and this month we would like to give you some insight into this benefit, we have noted that the premiums are relatively expensive for what benefit you receive, also note that you have to purchase other benefits in order to receive this benefit and this may just be why so few service providers offer this benefit.
We have 2 partners that currently offer this Retrenchment Protector. At Liberty Life you have to purchase Life cover at a certain % in order to obtain the retrenchment protector, and a more cost effective offering which I have illustrated below is FMI. In order to obtain this benefit you have to purchase temporary income protection.
At Discovery you are automatically offered this benefit as part of your income protection however, the benefit will only pay for your Discovery Premiums if you are retrenched and there are terms and conditions that apply and the benefit will NOT pay you an income directly.
Note the below information from FMI regarding this benefit, there are alternatives that pay for 12 months however should you require any further information or require a quotation please contact us and we will arrange for you > Click to email PBA Brokers
How does it work? Cover for this benefit is linked to the Temporary Income Protector (TIP) benefit on your FMI Individual policy. It is equal to 75% of your TIP cover or R30 000, whichever is lesser. Monthly pay-outs will begin after a waiting period of 30 days (from your retrenchment date.) It is important to remember that your retrenchment claim will be not considered if the retrenchment is announced within the first six months of the cover bring taken.
This benefit has a 6 month benefit term for a single retrenchment and you will be covered for a maximum of two retrenchments per policy. We will pay out for a retrenchment until the first of the following:
• The end of the benefit term • The day you are employed • The day you stop seeking employment • Your death • The policy anniversary following your 65th birthday. If you have chosen a cease age on your FMI Individual policy of 55 or 60, cover will cease on the policy anniversary following your 55th or 60th birthday respectively.
Am I eligible for this cover? Not everyone can be covered by the Retrenchment benefit. In order to qualify, the following criteria need to be met: • You must have been in full-time, uninterrupted employment for 24 months before the start of the cover. • You must have been in full-term employment with your current employer for 12 months before the start of the cover
You are not eligible for this cover if you are:
• Self- employed
• The director of a company / partner in business / member of a CC employed family business
• A professional sports-person
• A part - time, casual, temporary, seasonal or contract worker
• A commission earner
• Working in the mining, construction and/ or fishing industries