If we gave you the choice between a single R100 000 lump sum pay-out today, or a recurring cheque worth R10 000, that cleared in your bank account every month for the next 30-years, which option would you choose?
No need to reach for the financial calculator to work this one out.
· Option A is worth R100 000
· Option B is worth up to R3 600 000 (over a period of 30-years)
But what if you could have both? What if you didn’t need to make a choice?
Did you know that roughly 19 million South African adults have funeral cover in place?
That’s millions of South African families who can go to sleep at night knowing that if the breadwinner in the family passed away, they would have enough money to cover the cost of a decent funeral.
The sad reality is that any true innovation in the funeral cover space has been limited to:
· Free tombstones
· Grocery benefits
· Some airtime loaded onto a phone
· Perhaps a little cashback
· Limited repatriation benefits
We’ll give our competitors a lukewarm round of applause for their efforts, only because we’ve been wrestling with much bigger questions, other than providing airtime as a funeral benefit.
These are the types of questions that have been keeping us up at night:
- If you have a Stangen funeral policy, can we provide your family with an income?
- How much income would we provide without asking for a medical exam at application stage?
- Is covering the cost of a funeral enough nowadays?
One of our core philosophies at Stangen is to innovate to meet a real social need.
All that really means is that our team gets out of bed each day to make a real difference. Anybody can sell insurance, but we want to design products that people need.
We are very proud to announce what we believe is the first funeral benefit of its kind in South Africa.
Our revolutionary Dependents Income Protection Benefit gets bolted onto your existing funeral plan. Over and above your existing once-off payment designed to cover the cost of your funeral, this benefit pays out a monthly income to your nominated beneficiaries for up to 30-years.
Yes, your eyes didn’t deceive you. We’ve turned a funeral policy into a future income policy.
This is how the product works.
We will pay an income equivalent to 40% of the policyholder’s income (capped at R10 000) per month to beneficiaries nominated on the policy, for up to 30-years.
Let’s look at a quick example:
Francis earns R20 000 per month and has a daughter who is 7-years old. She would like to add the Dependents Income Protection Benefit to her Stangen funeral policy (which already includes a R50 000 cash lump sum for funeral costs).
In order to work out the max coverage that Francis can bolt onto her policy, we need to work out how much she qualifies for.
Remember that the calculation is:
Take 40% of your gross income and if it is lower than R10 000 (the cap) that is how much you can take out.
That means Francis can protect her child’s future financial needs by adding an R8 000 pm income to her policy.
Now the next question is how long does the income last?
Before we get to that it’s important to note that this Dependents Income Protection Benefit is limited to adding the following people on your policy.
It’s obvious why you would consider leaving an income to your kids when you pass away, but what is less obvious (and extremely relevant) is how many South Africans are looking after parents who are financially dependent on them.
In fact, this group of people are now commonly referred to as the Sandwich Generation. Not only are millions of South Africans getting up every morning to make sandwiches for their kids, they are also buttering bread for their folks who have fallen on hard times.
We recognise this problem and we want to address it with our new benefit.
Let’s get back to how long we can provide the income for:
Children are covered until age 21 (age 25 if they are disabled)
Parents and parents-in-law are covered for 30-years (or until they pass away)
If Francis passed away today, her child would be entitled to R8000 per month until she turns 21. That is up to R1 344 000 in benefits over 14 years.
Anything else you need to know about?
Here are a couple of additional points worth noting:
- You can add up to 8 children, but the minimum benefit is R750 pm per child.
- You can add one parent.
- You can add one parent-in-law.
- There is a 4-month general waiting period before we will entertain a claim.
For more information and a quote please feel free to get in touch with us by leaving your details in the call back form below.
Before we go, we just have one last question for you – If you have a funeral policy in place, are you comfortable with the fact that it only covers the cost of your funeral?
Until next time.
The Stangen Management Team.