Old Mutual has developed a new comprehensive plan that enables you to cover all your risks with one product, to adapt it as your needs change and to keep your assurance needs separate from your savings.
The product, called Greenlight, offers a range of benefits, including cover against death, disability and dread diseases. The benefits you can choose are flexible, so, for example, you could insure yourself against not being able to do your job when you are still capable of earning a living in another way.
Doug Clothier, the manager of insurance business at Old Mutual, says one of Greenlight's benefits defines disability in terms of ability to do daily activities. There are eight categories of tests which objectively measure this ability. He says this means that a person such as a housewife can now insure herself against, for example, being incapable of looking after her children and the expense of hiring someone to do this for her.
The new plan also introduces partial disability payments. Clothier says in some cases a disabled person is able and willing to do some work, such as a half-day job. In the past, these people would lose their disability benefits if they did work. Now they will be able to take a reduced benefit, which takes account of the income they are earning and their inability to earn what they did before they were disabled.
Greenlight also enables you to insure against a package of specific severe illnesses, such as cancer or a stroke.
Clothier says the product allows people to buy stand-alone assurance for, for example, death or disability. This means you can buy only the type of cover you need, or buy both separately, and be sure that if you are disabled and claim, your death benefits will not be affected.
Greenlight allows you to cede benefits you have bought separately. So, for example, if you take out a home loan you could cede your death benefits only to the bank, giving you the peace of mind that your other benefits are not affected by the cession.
You can add multiple lives to your plan, which is useful for families. Each life can be covered for the benefits that the person needs.
Greenlight policyholders will also be provided with feedback on their medical tests, Clothier says. You will be sent a summary of your health information, or your test results will be sent to your doctor so that you will be given any necessary advice.
If you fail to pay a premium for a Greenlight policy, there is a 31-day grace period during which your cover is not affected. If, after this period, you still haven't paid the premium, your cover will cease. However, Old Mutual will allow you to revive your policy within six months with a minimal amount of underwriting - that is, you will be asked a few questions about, for example, the change in your health over those six months.
Clothier says you will also be able to buy cover that increases every year and maintains the value of the cover in real terms.
"Cover increases can be linked to an international currency index (United States dollar or British pound). There is no additional charge for this feature."
There are no administration fees on the policy and commission is payable at the standard rates allowed in terms of the regulations, although you can negotiate a lower rate with your broker: In the first year of the policy it is 3.25 percent of the premiums paid in that year multiplied by the term of the contract up to a maximum of 27 years. In the second year, it is a third of the amount paid in the first year.