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NEW ADVISER CURRICULUM Module 3: The RMM Product Offering.

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Presentation on theme: "NEW ADVISER CURRICULUM Module 3: The RMM Product Offering."— Presentation transcript:

1 NEW ADVISER CURRICULUM Module 3: The RMM Product Offering

2 BASIC TERMS & CONCEPTS

3 BASIC TERMS AND CONCEPTS We will be dealing with 2 types of cover: ■Initial cover: the amount of cover that a customer applies for ■Current cover: the amount of cover that will pay out at claim stage On some of our products the cover will increase on an annual basis and therefore the current cover is usually greater than the initial cover. 2 What is cover or benefit amount? Cover is the lump sum amount that a customer chooses or qualifies for. It is also commonly referred to as benefit amount. The cover or benefit amount becomes payable on death or disability of the covered life.

4 BASIC TERMS AND CONCEPTS 3 What is a premium? Premium refers to the amount that a customer will contribute towards a specific cover/benefit amount when dealing with protection policies. We will be dealing with 3 types of premium: ■Initial premium: the premium a customer agreed upon at application stage. ■Current premium: the last premium a customer would have paid before a claim. ■Contractual premium: the total premium on a policy contract. On some of our products the premium will increase on an annual basis to pay for the increased level of cover.

5 BASIC TERMS AND CONCEPTS 4 What is a waiting period? No cover will be paid during the waiting period if the covered life dies or becomes disabled due to natural causes. The waiting period is determined by the specific product a customer selects but for most of our products there is a 6 month waiting period. Should a covered life die due to natural causes within the waiting period, Old Mutual will refund all the premiums that the customer paid. This is known as the Money Back Guarantee. There is no waiting period for accidental death. Why must there be a waiting period?

6 BASIC TERMS AND CONCEPTS What is the difference between natural and accidental causes? Natural causes death/disability ■When death or disability is caused by an event that cannot be traced to an external cause. Examples: ■Heart attack ■Stroke ■Old age ■Cancer Please take note that suicide is treated the same as natural causes as it can never be considered an accident. 5

7 BASIC TERMS AND CONCEPTS Accidental death/disability When death or disability is caused by an event that can be traced to an external cause. Examples: ■Car accident ■Assault 6

8 BASIC TERMS AND CONCEPTS When does Old Mutual recognise a disability? Loss of use disability (Type A-Disability accelerator) Disability will be recognised in the event of: ■Total and permanent loss of at least one hand or foot and/or the loss of sight in at least one eye due to an accident, or ■Total and permanent blindness or total and permanent loss of the use of both hands or both feet or one of each due to sickness, or ■A full-time teacher suffering total and permanent demonstrable physical damage to the vocal chords or ■A court interpreter suffering total and permanent demonstrable physical damage to the vocal chords or suffers loss of hearing. 7 Retirement Plan disability provisions (Type D) Disability is recognised if the insured has suffered permanent incapacity resulting from any cause whatsoever such that he/she is prevented from engaging in his/her usual occupation for remuneration or profit.

9 BASIC TERMS AND CONCEPTS Nationality What is citizen? ■A person who is born in South Africa. The ID book reflects,” SA Citizen”, just below the bar coded ID. What is a permanent resident? ■A person who resides in South Africa and has been residing in South Africa long enough to be deemed permanent resident. The permanent resident ID book reflects, “NON SA CITIZEN”. What is a non-permanent citizen? ■He/she has not been in the country long enough to be considered a permanent resident and has not been issued with an ID book. 8

10 BASIC TERMS AND CONCEPTS A policy benefit that allows the customer to miss up to 6 premiums during times of financial difficulty such as retrenchment, unemployment, maternity leave and study leave. There are two types of Premium Holiday benefits available: the Automatic Premium Holiday and the Requested Premium Holiday. How does the Automatic Premium Holiday work? ■During the first 6 years of the policy, the customer qualifies for 1 skipped premium per year. Every unused Premium Holiday gets carried over to the next year. ■The Automatic Premium Holiday becomes available at any time after the first premium was received by Old Mutual. ■Should a customer miss a premium payment after the first premium, Old Mutual will assume that the customer is making use of the Automatic Premium Holiday. 9

11 BASIC TERMS AND CONCEPTS How does the Requested Premium Holiday work? ■After a customer has paid 6 premiums he/she may contact Old Mutual and request to skip up to 6 premiums. The customer must give Old Mutual 1 month’s notice. ■A customer has the option to repay all skipped premiums but this is not compulsory. If a customer chooses to repay skipped premiums it can be skipped again in the future. Please take note: The 6 premiums available for the Premium Holiday Benefit is a combination between the Automatic and Requested Premium Holiday. 10 What is the Grace Period? The customer has 31 days from premium due date to pay the premium. If the premium is not received in this period, and the Premium Holiday Benefit has been exhausted and is no longer available, the policy will lapse or become paid-up.

12 BASIC TERMS AND CONCEPTS What is the Reinstatement Period? ■If the Premium Holiday Benefit is exhausted and the Grace Period has been used, the customer will enter the three month reinstatement period. A customer does not enjoy cover during this period. This means that should a covered life die during this period, no claim will be paid. ■Only the first reinstatement period will be free. This means that the customer only has to pay 1 premium to activate the policy again. They will have 3 months to pay this premium. ■Any reinstatement periods after the first one will be 6 months long and the customer has to repay all premiums that are in arrears. Below is an illustration of the Requested Premium Holiday in combination with the Grace Period and the first (free) Reinstatement Period. 11 1 1 2 2 3 3 4 4 5 5 1 1 2 2 3 3 4 4 5 5 6 6 1 1 1 1 2 2 3 3 6 6 Pay 6 premiumsSkip up to 6 premiumsGrace PeriodReinstatement Period Lapse

13 BASIC TERMS AND CONCEPTS 12 What does paid-up mean? Some of our policies can be made paid-up or becomes automatically paid- up once certain conditions are met. The simplest way explain the concept is with the following illustration. Premiums stop Cover/Benefit continues


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