Life assurer, Hollard Life, has set the pace for its bigger rivals by offering those in ill health a fair deal when it comes to paying annuities.
Hollard has announced that it will now pay better annuities (monthly pensions) to the chronically ill who invest a minimum of R25 000.
Managing director Miles Japhet says someone with a chronic heart condition will receive at least six times more than a healthy client.
With an annuity payment, a life company agrees to pay you a certain sum every month until you die in return for a lump-sum investment.
Japhet said people unfortunate enough to have serious health problems when they retired, such as heart disease, cancer or a stroke, invariably got a raw deal on annuities as they got the same terms as someone who was healthy. This meant the unhealthy were subsidising the healthy.
"We are not only looking at providing enhanced annuities for people with extremely serious conditions, such as cancer and Aids, but also conditions such as cirrhosis, diabetes, chronic bronchitis and Alzheimers."
Similar products have been around for some time in mainland Europe and were recently introduced in Britain.
In Britain a special annuity was also introduced for smokers, who are normally penalised when taking out life assurance. Smokers are not included in the Hollard product.
60Cancer of colon with secondariesR1 489R8 329459%
34Recent HIV +R1 295R2 018 56%
37Full blown AidsR1 302R3 925201%
64Renal failureR1 566R1 963 25%
65Alzheimer'sR1 589R2 541 60%
59Triple by-pass, diabetic R1 473R1 991 35%
Assumptions:
* R100 000 purchase price
* Nil guaranteed period, 0% escalation, single life annuity
* Income guaranteed for the lifetime of the annuitant
Source: Hollard Insurance