Death, disability and voluntary critical illness

Death benefits

We realise that each of you, our members, face different social circumstances and we therefore aim to provide you with the flexibility to choose the amount of cover that best suits your needs and budget by allowing you to select the level of death cover (based on a multiple of your annual pensionable salary) according to your current age.

In order to make the right decision for you it is important that you fully understand the options that are available to you.

The table below illustrates the different age bands, the level of death cover available in each age band and the default selection that will be applied if you do not make a formal selection.

You will automatically be moved to the next age band on 1 July following your attainment of age 30, 40, 50 and 55 (whichever is applicable).  Your level of cover chosen (i.e. the multiple of your annual pensionable earnings chosen) in the old age band will be continued in the new age band with the following exceptions:

  • On moving from the (30-39) age band to the (40-49) age band, you will qualify for an increase in the maximum multiple from 5 to 6 times your annual pensionable earnings. You will be alerted to this and you will be permitted to increase your multiple of cover.
  • On moving from the (40-49) age band to the (50-54) age band, your maximum cover reduces from 6 times to 5 times your annual pensionable earnings.
  • On moving from the (50-54) age band to the (55-75) age band, your maximum cover reduces to 2 times your annual pensionable earnings.

Please note : A special dispensation applies to members prior to 1 September 2017. Click here for more information.

The premium for your death benefit insurance cover is based on your age and the amount of death cover selected (i.e. the multiple of annual pensionable earnings chosen). The general principles are that the insurance premium for younger members is lower than for older members and the higher the multiple chosen, the more the cost. Each age band has its own unit rate which is expressed as R/cents per R1000 cover.

Summary of the structure of the death benefit and how it works

  • The death benefit cover is designed to offer the appropriate amount of insurance at the ages where it is expected to be most required. All members under the age of 55 can access as much as 5 times annual pensionable salary as death cover (6 times between the ages of 40 and 50).
  • As you get older the value of your Member Share in the Fund, which is also payable at death, increases. With the increase in your Member Share, the need for death benefit insurance is likely to reduce. For this reason the maximum death cover is two times annual salary for members older than 55.
  • Following insurance principles, as you get older the premium for the same level of death benefit insurance increases.
  • Take time when joining the Fund to make the appropriate selection. Future changes are allowed, especially for specific life events, but routine annual increases in cover are likely to be subject to various conditions.
  • At any time – effective 1 July each year – you may reduce the level of your death benefit insurance as a way to manage both the cost of the benefit and your need for cover. You may also choose to increase your level of cover but this may be subject to medical underwriting.
  • Death cover stops when you turn 75 years old.
  • The trustees use your beneficiary nomination form as a guideline when making decisions regarding to whom to allocate your death benefit. Always make sure you have completed and updated this form, especially as your life circumstances change.
  • The death benefit insurance will continue for the first 31 days after your termination of Fund membership. This means that if you die during the 31 days immediately after the termination of membership, your family may submit a claim to the fund. You have up to 90 days after your termination of employment to elect to continue your cover through an individual insurance policy from the insurer. No medical underwriting is required. This option is available up to age 75.

We understand that personal circumstances change, which may have an impact on the death cover you need. That’s why the LA Retirement Fund allows you to change your death cover option when you experience any of the following (referred to as life events*):

  • Marriage
  • Divorce
  • The death of a spouse
  • The birth of a child
  • Promotion
  • A member whose contract of employment changes from permanent and in full-time service of the employer to an employee employed on a fixed-term contract or vice versa may change his/her death cover option on the date of the employment contract change.

Present the applicable supporting documents (e.g. marriage or birth certificate) together with the Life events that require a change in insured death and disability income benefits option form and you may increase (or decrease) the level of your death benefit cover and it will take effect from the 1st of the month following confirmation of the life event.  Confirmation of the “life event” must be presented within 3 months of the event. If not, principles as listed under the annual change will apply.

Once a year you may increase your level of cover by increasing your chosen multiple or you may decrease your cover by decreasing your multiple.  Your application to increase your cover must be received by the administrator by 31 March and, if approved by the insurer, the increase will take effect from the 1st of the month following the insurer’s approval (earliest 1 July). An application to increase death cover is subject to you having to provide proof of good health to the insurer. The medical information required will be determined by the insurer and the costs associated with medical tests and/ or examinations will be paid for by the insurer. If you decide to decrease your cover, your application must be received by 31 May.  No medical information is required when requesting a decrease in death cover. Please access the form from the website under risk benefits.

If you have selected the fund’s death cover you automatically qualify for the new family assistance benefit (a product offered through Momentum). This benefit is provided to you at no additional cost. 

This benefit provides support to you and your immediate family (including parents-in-law) during traumatic life events, such as bereavement, hijacking and sexual assault. It is in these times that bereaved families or trauma victims need a helping hand to guide them through the associated difficulties. The Family assistance benefit provides this help in many ways.

 In the case of bereavement, the insurer assists with:

  • repatriation – ensuring the deceased member is safely returned home.  These costs are borne by the insurer.
  • funeral assistance – helping with funeral arrangements for the deceased.  This does not include the payment of funeral costs
  • discounts from certain funeral and transport service providers may be available.
  • legal advice – in the form of legal assistance on call
  • bereavement counselling – arranging telephonic or face-to-face support and advice.

In the case of trauma (hijacking or sexual assault), the insurer assists with:

  • HIV protection services (i.e. up to 3 blood tests, 30-day antiretroviral starter pack, 7 day course of STI medication and morning after pill)
  • emergency medical services are sent to the scene of the medical emergency and the injured is transported to the nearest medical facility that can treat the emergency.  The cost of hospital care is not included.
  • Telephonic or face-to-face trauma counselling and support services

Momentum dedicated Call-centre details:
Call:  0861 666 111

This number is available 24 hours a day, 365 days a year. Another person may also call on your behalf.

Click here to find out more.

Disability benefits

All new members (from 01 August 2017) are automatically covered for a disability income benefit. You will need to formally select not to be covered for this benefit on appointment if that is your choice. Joining the disability insurance scheme at a later stage is restricted to life events only and on condition that it is requested within 3 months of the specific life event (examples of specific life events are detailed under the death benefits section).

Please note: If you select disability insurance on entry into the Fund, you CANNOT at any other stage opt out of the disability income benefit.

If you become disabled prior to retirement and whilst still a member of the LA Retirement Fund, you may qualify for a monthly disability benefit as follows:
With effect from 1 August 2019 the level of the benefit (i.e. the % of pensionable salary)will be determined by your age at disability. The following table records the benefit applicable to the various age bands:

Please note that once your claim is admitted, your benefit will not reduce as you get older.

Example: a member aged 42 becomes disabled and the insurer grants the benefit. The benefit payable will amount to 65% of pensionable salary and this level will be maintained for as long as the claim is valid.

All claims already admitted before 1 August 2019 are unaffected by the above benefit structure.

The maximum monthly disability benefit is equal to R200,000 per month (these rand limits are reviewed from time to time).

The disability benefit becomes payable 3 months after you first become disabled and is increased annually at the lesser of 7% or the increase in the Consumer Price Index (CPI).

The disability benefit is payable until your death, recovery, or retirement (at age 65), whichever occurs first.

For you to receive a disability benefit, you must be medically assessed and your condition must satisfy the requirements set out in the insurance policy. A member will be regarded as disabled if in the opinion of the insurer and after the expiry of the 3 month waiting period, he is continuously and totally unable to perform his own occupation. After 2 years, your disability will be measured against your ability to perform a similar occupation, taking into account your education, training, experience and degree of disability. Once in receipt of a disability benefit, the insurer will monitor your condition and will require regular medical reports from specialists for that purpose.

If you are a higher earner (i.e. where your disability income benefit exceeds R65,000 per month, including the employer waiver), you may be asked for proof that you are in good health before the Insurer will cover you for your full potential benefit. You will be informed, should this be necessary.

The premium for your disability income benefit cover is 1.837% of pensionable salary. These premiums will be automatically deducted from the monthly contribution your employer makes to the Fund on your behalf. They attract fringe benefits tax but the disability benefit is paid tax-free

You will remain a member of the LA Retirement Fund for as long as the disability benefit is paid and your member share will continue to grow by contributions and investment returns. You will also keep your funeral cover and, if you pass away before you your normal retirement age of 65, your dependents will stay covered under the funeral benefit until you would have turned 65.  In this case, your dependants will remain covered but will not be required to pay any further monthly premiums for this cover.  You also keep your chosen level of fund death benefit for as long as you remain a member of the Fund.

You have up to 90 days after your termination of employment to elect to continue your cover through an individual insurance policy from the insurer. No medical underwriting is required. This option is available up to age 60.

Voluntary Critical Illness

As a member of the LA Retirement Fund, you qualify to take out affordable critical illness cover for yourself within 3 months of joining. This voluntary benefit is provided by Momentum.

The purpose of the benefit is to help you with any potentially overwhelming expenses and lifestyle adjustments caused by a critical illness or condition.

Click here to find out more