OPTIONAL INSURED DEATH BENEFIT

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In addition to the member share payable on death in service, you may choose to be covered for a lump sum payment equal to a multiple of your annual pensionable salary or you may choose not to have any insured death cover.

We realise that our members face different social circumstances and therefore the Fund gives you the option 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 as per the table below.

Multiple of annual pensionable salary (APS)

Younger than 40

0 (No Cover)

1

2

3

4

5


Aged 40-49

0 (No Cover)

1

2

3

4

5

6

Aged 50-54

0 (No Cover)

1

2

3

4

5


Aged 55 - 75

0 (No Cover)

1

2





If your pensionable salary is R25 000pm and you elect 5 times annual pensionable salary you will be covered for an amount of
(R25 000 x 12) x 5 = R1 500 000.
Please be aware that there may be a difference between you remuneration package and your pensionable salary.
 

An automatic default is applied in the event that you do not select your choice on your new member application form. The default is as follows:

You will automatically be moved to the next age band on 1 July following your attainment of age 40, 50 and 55 (whichever is applicable).
A special dispensation applies to members prior to 1 September 2017. Click here for more information.
If you have selected the Optional Insured Death Benefit, you automatically qualify for the family assistance benefit from Momentum. Click here for more.
 

What is the cost of the death benefit cover?

 
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.
Month

Cents per R1 000 cover (unit) from 1 July 2023

Younger than 30

20.52

Age 30 - 39

30.78

Age 40 - 49

58.14

Age 50 - 54

94.04

Age 55 - 64

158.16

Age 65 - 69

309.50

Age 70 - 75

453.13

Death benefits example:  A member is 29 years old and earns an annual pensionable salary of R400 000. The member chooses cover of 2 X their annual pensionable salary = R800 000 cover
Calculation:  R800 000 x 20.52 (unit rate) / 1000 = R164.00 p.m. Premium to be deducted from the employer’s portion of the contribution towards the Fund.

For this member, the annual premium equates to a rate of 0.492% of their annual pensionable salary.

 

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.58
  1. Death cover stops at age 75.
  2. 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.
  3.  You have up to 90 days after your termination of employment to elect the conversion option in which case no medical underwriting will be required.
  4. You may change your cover at any time as a result of a life event.
  5. 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. Click here to access the form.
 

You must be in it to win

On page 3 of the December 2022 Member Newsletter, we announced a competition, where you could win a prize.

All you need to do is have your photo taken next to the Fund’s calendar and/or poster and send it to us. The competition closes on Tuesday, 31 January 2023.

Please send the photo to:

Email: competition@laretirementfund.co.za

WhatsApp: 081 778 0923

When sending in the photo, please tell us your name, your pension number or identity number and which municipality you work at. Please note that subject to the discretion of the Fund, all or some of the pictures submitted, may be published on the Funds’ website and/or on the Funds’ Facebook page.

Hurry to enter the competition, your photo could win the prize!