Discovery Life Group Risk. LIFE PLAN Guide

Transcription

1 Discovery Life Group Risk LIFE PLAN Guide

2 Contents Welcome Section 1 page 2 Lifestyle protection option Section 2 page 4 The Group Risk LIFE PLAN Section 3 page 5 Life Cover Benefit and the Global Education Protector Section 4 page 7 Income Continuation Benefit Section 5 page 11 Capital Disability Benefit Section 6 page 17 Severe Illness Benefit Section 7 page 21 Funeral Cover Benefit Section 8 page 31 Spouse s benefits Section 9 page 33 Rewards for managing your health Section 10 page 34 The Mortgage Protector Benefit Section 11 page 35 Premium payments Section 12 page 36 Underwriting and the Free Cover Limit Multiplier Section 13 page 39 How to claim and receive your benefits Section 14 page 40 Continuation option Section 15 page 43 General legal provisions, definitives and rules Section 16 page 44 Cession and beneficiaries Section 17 page 48 Discontinuance Section 18 page 49 Appendix 1 Disability Benefits page 50 Appendix 2 Activities of Daily Living score sheet page 59 Appendix 3 Severe Illness Benefits page 61 Ver 2009/08.1

3 Section 1 Welcome 1.1 Welcome to Discovery Life Discovery Life is part of Discovery Holdings, an established and financially sound company that has a reputation for pioneering products that set new standards in the assurance industry. Discovery Life offers unique and innovative Group Risk assurance products that will assist employers in providing valuable risk benefits to their employees and their families. 1.2 This document will help you to understand the finer details of the Discovery Life Group Risk policy The policy protects employees and their families from any life-changing events and is a valuable asset. It is important that the policyholder fully understands the protection given to employees by the benefits that have been chosen by the policyholder. 1.3 The policy consists of this Group Risk LIFE PLAN Guide and the benefit schedule The Group Risk LIFE PLAN Guide provides comprehensive information on all benefits offered by Discovery Life. Details of the Discovery Life benefits selected on the Group Risk Application Form appear on the benefit schedule accompanying this Group Risk LIFE PLAN Guide. It is important to check the benefit schedule carefully to ensure that the benefits chosen are correctly shown. The benefit schedule and the Group Risk LIFE PLAN Guide are read together when determining the benefits payable under this policy. 1.4 The policyholder can cancel this policy within 30 days If, after studying the benefit schedule and this Group Risk LIFE PLAN Guide, the policyholder is unhappy with the policy chosen, the policyholder can take advantage of a 30-day cooling-off period. The cooling-off period enables the policyholder to re-evaluate the policy purchased and cancel the policy by sending a written cancellation notice to Discovery Life within 30 days of the policy having been issued. The cooling-off period only applies if no benefits have been paid or an event insured against has not yet occurred. Any premiums paid will be refunded after the deduction of any costs incurred. 1.5 Need more information on this policy? Discovery Life can help We look forward to assisting you in resolving any problems which you may have and encourage you to contact us if necessary. For any event, you are welcome to contact: Your financial adviser as indicated on your benefit schedule. Discovery Life Group Risk contact centre at GROUP ( ) By [email protected] By fax: By mail: Discovery Life Group Risk PO Box 3888 Rivonia 2128 Discovery Life Compliance Officer: By [email protected] By phone:

4 1.6 How to lodge a complaint If you have received inadequate information or unsatisfactory service or have complaints about the advice you have received, please contact the Discovery Compliance Officer at [email protected] or on If Discovery Life does not resolve your complaint to your satisfaction, you may contact the parties mentioned below for assistance: 1.7 The Ombudsman for Long-term Insurance Postal address: Physical address: Telephone: or Private Bag X45 Sunclare Building Fax: Claremont 3rd floor 21 Dreyer Street [email protected] 7735 Claremont Website: Cape Town 7700 or 1.8 The FAIS Ombud Postal address: Physical address: Telephone: or Financial Services Board Eastwood Office Park Fax: or PO Box Baosbab House [email protected] Lynnwood Ridge Ground floor Website: Lynnwood Ridge, 0081 or 1.9 The Pension Funds Adjudicator Cape Town Postal address: Physical address: Telephone: PO Box th floor, Letterstedt House Fax: Claremont Cnr Camp Ground and [email protected] 7735 Main Street Newlands Website: on Main, Claremont, Cape Town Johannesburg Postal address: Physical address: Telephone: PO Box nd floor, Sandown House Fax: Benmore Sandton Close 2 [email protected] Website: 3

5 Section 2 Lifestyle protection option 2.1 Options available to the policyholder The policyholder must make two decisions: which CORE and PLUS Benefits to provide to members, and whether FLEX Benefits should be made available to members. 2.2 CORE Benefits The policyholder may select CORE Benefits, which are compulsory for and applicable to all members. CORE Benefits include the Life Cover Benefit and Income Continuation Benefit. These benefits cover the most essential risk needs and ensure that all members enjoy a core level of protection. The policyholder will define the benefit structure for the selected benefits. CORE Benefits are medically underwritten on a group basis in terms of free cover limits. 2.3 PLUS Benefits In addition, the policyholder may select PLUS Benefits, which are compulsory for and applicable to all members. PLUS benefits include the Capital Disability Benefit, the Severe Illness Benefit and the Funeral Cover Benefit. These benefits cover additional member risk needs and ensure that all members enjoy an additional level of protection. The policyholder will define the benefit structure for the selected benefits. PLUS Benefits are medically underwritten on a group basis in terms of free cover limits. 2.4 FLEX Benefits Lastly, the policyholder may select FLEX Benefits which are not compulsory and may be selected by members depending on their risk needs. These benefits provide increased cover funded by the members to extend their compulsory benefits. FLEX benefits include the Life Cover Benefit, the Capital Disability Benefit and the Severe Illness Benefit. FLEX Benefits have been predefined by Discovery Life (in terms of structure and benefit maximums). FLEX Benefits for members are medically underwritten on an individual basis. The free cover limit for FLEX Benefits is always zero. FLEX Benefits are not available to spouses. FLEX Benefits must be added within: three months of the scheme commencement date three months of entering the scheme as a new member after commencement date three months from scheme review date three months of a major event such as marriage, divorce, death, birth or adoption of a child. FLEX Benefits may be removed or decreased within three months after a major event such as marriage, divorce, death, birth or the adoption of a child. FLEX Benefits may only be re-added: within three months of review date within three months of an event such as marriage, divorce, death, birth or adoption of a child. Discovery Life has established maximum benefit levels for CORE, PLUS and FLEX Benefits. These limits will be reviewed from time to time. 4

6 Section 3 The Group Risk LIFE PLAN 3.1 The Group Risk LIFE PLAN The Group Risk LIFE PLAN provides cover for life-changing events for the whole family. These life-changing events include death, severe illness and disability. 1 Determine the level of cover for your employees with the CORE Benefits CORE Benefits These benefits cover the most essential employee risk needs and ensure that all employees enjoy a core level of protection. Life Cover Benefit Global Education Protector Mortgage Protector Income Continuation Benefit Performance Bonus Protector Contribution Protector Dynamic Spend Protector Mortgage Protector 2 Enhance the level of cover enjoyed by your employees with PLUS Benefits PLUS Benefits PLUS Benefits cover additional employee risk needs and ensure that they enjoy an enhanced level of protection. The employer chooses the additional benefits. Capital Disability Benefit Severe Illness Benefit Funeral Cover Benefit 3 Allow employees to voluntarily extend their benefits at their own cost FLEX Benefits FLEX Benefits are not compulsory and are selected by employees as a multiple of their salary. Life Cover Benefit Capital Disability Benefit Severe Illness Benefit 4 Join Vitality and have your employees engage in a state of the art health and wellness programme Vitality Vitality is a wellness programme that empowers employees to improve their health by giving them the knowledge, tools and motivation to set and meet health goals. The more healthy your employees, the more Vitality rewards them and the greater the productivity in the workplace. The Discovery Life Group Risk LIFE PLAN includes various combinations of benefits to be selected by the policyholder. These combinations assist the policyholder in providing members with benefits that meet their risk needs and provide additional access to unique and flexible products for the member on a voluntary basis. 5

7 Section 3 The Group Risk LIFE PLAN 3.2 The LIFE FUND is the financial foundation of the Group Risk LIFE PLAN The Group Risk LIFE PLAN has as its basis a LIFE FUND for each member, which is the financial mechanism of the Group Risk LIFE PLAN. The LIFE FUND is used to fund benefit payments for the benefits selected by the policyholder. 3.3 The effect benefit payments have on the LIFE FUND a life-changing event is defined as: Death or an illness or disability that is severe enough to affect your lifestyle or your ability to earn an income and so lowers your standard of living. If all premium payments are up-to-date, Discovery Life will pay the member for the life-changing events covered by the benefits indicated in the Benefit Schedule. Benefit payments are defined as: Any amount of money paid to the policyholder (or as instructed by the policyholder) as a result of a member claiming against their LIFE FUND for a life-changing event. When a member receives a benefit payment from his or her LIFE FUND, the value of the LIFE FUND is reduced by the amount of the benefit payment, unless specified otherwise by the policyholder. If a member qualifies for benefit payments from more than one benefit as a result of the same life-changing event, the highest benefit payment will be processed first and the member s LIFE FUND will reduce by this benefit payment amount. Subsequent benefit payments related to the same event will then be processed against the reduced LIFE FUND value after the previous benefit payment has been deducted. The same effective date will apply for the assessment of benefit payment amounts for these multiple claims. This effective date is the date on which the life-changing event occurs. The benefit payment will be expressed as a percentage of the LIFE FUND and this is the amount by which the LIFE FUND will reduce. Example: Let s assume a member has a LIFE FUND of four times annual salary and a Capital Disability Benefit of twice their annual salary (equivalent to 50% of the LIFE FUND). When a Capital Disability Benefit payment is made, the LIFE FUND will be reduced by 50%. 3.4 The LIFE FUND can be protected The Minimum Protected FUND option allows the policyholder to specify a minimum level for the LIFE FUND. If this option has been selected, the balance in the member s LIFE FUND will never drop below the specified minimum balance, regardless of how many benefit payments have been made or what the monetary value of these payments was. The Minimum Protected FUND is expressed as a percentage of the LIFE FUND. Example: assume that a LIFE FUND of four times annual salary was selected and a Minimum Protected FUND of twice their annual salary (50% of LIFE FUND). No matter how many claims a member makes against a LIFE FUND, the balance left in the LIFE FUND will never be less than twice their annual salary. The choice of a Minimum Protected FUND will affect the premiums charged. The extra premium will depend on the Minimum Protected FUND level and also on the cover selected for the various benefits. 3.5 The LIFE FUND can grow again even after a benefit payment has been made The LIFE FUND will be reduced by the amount of the benefit payment. However, the LIFE FUND will continue to grow after a benefit payment by the annual salary increase percentage of the member. 3.6 How are the benefits expressed? The benefit schedule indicates the benefits selected by the policyholder. These benefits are usually defined as a multiple or percentage of the member s annual salary, a flat rand amount or a variation thereof. 6

8 Section 4 Life Cover Benefit and the Global Education Protector 4.1 What is the Life Cover Benefit? The Life Cover Benefit provides cover for members in the event of their death. If a spouse s Life Cover Benefit has been selected, the death of the member s spouse will also be covered. On death of the member, the value of the LIFE FUND at the date of death is paid. The value is determined as follows: (i) initial LIFE FUND (CORE and FLEX) plus (ii) any amount by which the LIFE FUND has grown, due to salary increases, as well as any additional increases or decreases made by the member to his or her FLEX Life Cover Benefit. less (iii) any benefit payments previously deducted from the LIFE FUND. 4.2 When the Life Cover Benefit ends The Life Cover Benefit ends at the selected benefit expiry age or if the member is no longer an eligible employee. The benefit expiry age is chosen by the policyholder and is generally the member s normal retirement age. This means that if the member dies in service before the benefit expiry age, the claim will be assessed and paid, but claims after the benefit expiry age will not be accepted. Premiums will not be charged for the Life Cover Benefit after the member reaches the benefit expiry age. 4.3 The Global Education Protector The Global Education Protector is automatically included with the CORE Life Cover Benefit of the Discovery Group Risk LIFE PLAN, if the CORE Life Cover Benefit is equal to at least twice the member s annual salary. 4.4 How does the Global Education Protector work? The Global Education Protector provides indemnity cover for the education of a member s child/children in the event of his or her death. The Global Education Protector works on an indemnity basis. This means that the actual education payments which were being made by the member for his or her children s education, immediately before his or her death, will be continued by the Global Education Protector. The Global Education Protector aims to ensure that the education of the member s children is not affected by the death of the member. In line with the indemnity principle, the Global Education Protector will pay the fees for the member s children at the educational institution that they were at immediately before the death of the member. If the children attend a no fees school or are exempted from paying fees no benefit will be paid from the Global Education Protector. Subject to the Private School Upgrade described below, upgrades to private schools are disallowed in general. For example if the member paid R2 000 per month for his or her child in Grade 3 at XYZ School, these payments would be continued after his or her death. To determine future payments, for future years of education, the fees payable at XYZ School would be the fees paid under the Global Education Protector to indemnify the member and would form the basis of future payments taking into account inflationary increases. This means that if a child has moved to a more expensive school, payments will be restricted to that which would have been payable at XYZ School. The benefit payments are made annually, directly to the institution where the child is being educated. If any legislation or circumstances prevent funds being paid directly to the education facility, Discovery Life reserves the right to pay the policyholder or the member s beneficiaries directly. 7

9 Section 4 Life Cover Benefit and the Global Education Protector 4.5 Who qualifies for the Global Education Protector? To qualify for a benefit payment the child must be the natural or legally adopted child of the member and Discovery must have been notified of the existence of the child. Adoption will only be considered as valid if the date of adoption or the date of application for adoption is before the date of death of the member. 4.6 Are stepchildren covered? The stepchildren of the member may be covered if the following conditions are met: The member must be married to the stepchild s mother or father before the date of event giving rise to a claim. The stepchild will only be eligible for the Global Education Protector if the member has notified Discovery Life of the existence of the stepchild. If the member divorces the mother or father of the stepchild, the benefit falls away for that stepchild. 4.7 The Global Education Protector will cover the following years education Benefit payments cover the following years of education: Pre-school (Grade 000/00/0/R) 1 year Primary school (Grade 1 to 7) 7 years High-school (Grade 8 to 12) 5 years Tertiary education a 3-year undergraduate degree or recognised trade diploma/certificate. All South African universities are included in this benefit, as well as universities of technology (technikons), recognised institutions providing for a trade (such as plumbing and electrical) and certain overseas universities. 4.8 Benefit payments will end in the following instances Benefit payments will be made until the earlier of: The child leaving school or university; or The child completing a tertiary education; or The child turning 24; or The child not returning to school or university after the gap year described below. The death of the child; or The member reaching the benefit expiry age; or The member no longer being an eligible employee. 4.9 We will provide additional funding for certain fees on tertiary level Apart from the actual education tuition fees, we will cover book fees and residence fees up to certain maximums. These payments are only made for tertiary level education. Book fees the actual fees for books, up to a maximum of 10% of the actual tertiary education fees. University residence fee the actual fees for university residence up to a maximum of 30% of the actual tertiary education fees. The book fee and university residence fee are not included in the maximum benefit payable to an educational facility. Benefit payments will not be made if the child does not attend an education facility for any reason whatsoever. 8

10 In the case of university, benefit payments will be based on education fees at a South African university, or a selected list of overseas universities, if the child gets accepted at an overseas university on this list. The list of approved overseas universities may be changed by Discovery Life from time to time. In the event of the spouse and/or the children emigrating from South Africa, benefits paid will be based on education fees for South African facilities, and not the rate of fees applicable to education in their new country of residence. If the child is enrolled in a university on Discovery Life s select list of overseas universities, benefit payments for the overseas university will be paid in full, subject to the maximums applicable at the time The following expenses will not be covered by the Global Educator Protector Any registration fees Any book or residence fees for non-tertiary institutions Any utensils or equipment required for studies Excursion fees Au pair fees Aftercare fees How does Discovery deal with children who become eligible for benefits from the Global Education Protector before school-going age? Discovery Life will consider the payment of Private School fees under the Global Education Protector if; The child was registered at or placed on a waiting list for a private school; or If the child s elder siblings were already attending a private school What happens when a child changes education facilities? If a child changes educational facility after the death of the member, Discovery Life will, subject to the Private School Upgrade Benefit, continue making benefit payments at the rate applicable to the educational facility at the time of the member s death. Discovery Life does not cover any additional cost of the new facility above the fees for the facility at the time of the member s death, as this is against the indemnity principle of the Global Education Protector. The same rule applies in the event of a child changing from a local tertiary educational facility to a university on Discovery Life s selected list of overseas universities or other local tertiary education facilities. If a child upgrades between primary and high school, there will be no increase in payments to allow for the upgrade (for example from a public to a private institution). If there is an older child attending a Model C school or government school, and a younger child attending a private school, or a younger child (not of school-going age) registered for private school, the older child will not be allowed to upgrade to a private school, as this is against the indemnity principle of the Global Education Protector. If a child attends a free or low cost school, and wishes to upgrade to a Model C school, this is not allowed as this is against the indemnity principle of the Global Education Protector What happens if a child fails a year of education? For all the years up to the end of high school, the child may fail one year. In this case, Discovery Life will only pay 33% of the relevant fees to repeat the year. If the child fails again, benefit payments will stop until the child progresses to the next grade of schooling. In the event of failing a year of university, diploma, trade qualification, or similar qualification in full, Discovery Life will not pay any benefit to repeat the year and benefit payments will stop until the child progresses to the next year of education. Discovery Life regards failing two-thirds or more of the subjects in a year as failing the year in full. If the child progresses to the next year of education, having passed more than one-third of the previous year s subjects, Discovery Life will continue to make benefit payments in full. If a child has passed matric and wishes to pass further subjects to get matriculation exemption, a maximum of one-third of the actual fees payable during the matric year (or up to the benefit limit if no fees were paid), may be payable. 9

11 Section 4 Life Cover Benefit and the Global Education Protector 4.14 Can the child take a gap year? Years of education must run consecutively. However, the child may take off one year between completing high school and starting university or similar tertiary education. No benefit payments will be made for this year. The rules on cessation of benefit payments will still apply, which may result in benefit payments ending before the child completes his or her education Can the child upgrade to a private school? A child may apply to Discovery Life to upgrade from his or her current school to a private school on the following conditions: At the date of the member s death, the member s Vitality status must have been at Bronze or higher; and Application for the upgrade must occur within 12 months of the death of the member; and The Private School fees to which the child intends to attend are not higher than the standard Global Education Protector maximums set by Discovery Life from time to time; and The child must have been accepted by the private school. Payment of the benefit for a private school is limited to a maximum term of 12 years. Fees for private school education are limited to a maximum amount set by Discovery Life from time to time How does the Global Education Protector affect the tax paid by a member? The Discovery Group Risk Global Education Protector is offered on an unapproved basis only. No retirement fund rule amendments are necessary to offer this benefit. Members should pay fringe benefit tax on the Global Education Protector premium, based on the deemed premium, as set by Discovery Life, for the scheme. The premiums for the Global Education Protector will increase annually at a rate determined by Discovery Life. Premiums for this benefit are not guaranteed. Members are advised to seek appropriate guidance from a tax professional or from their authorised financial services providers for the correct tax treatment of the Global Education Protector premiums and benefits What other legal provisions will apply to the Global Education Protector? Both the actively at work and the pre-existing conditions clauses will automatically apply to the Global Education Protector. This is irrespective of whether Discovery Life has waived this clause for other benefits. If a member has other individual or group life policies that also provide education benefits, Discovery will reduce its benefit payments in the ratio of the potential Discovery payment to the total payment received from all policies. The Global Education Protector cannot be ceded. If both parents are members of different group schemes insured by Discovery Life and then both die, no additional payments will be made in excess of the actual costs of the child s education. The Global Education Protector will not be paid on the death of a spouse. Benefit payments from the Global Education Protector will have no impact on the LIFE FUND What information is required for the payment of the Global Education Protector? The burden of proof of eligibility for the Global Education Protector is that of the policyholder, or whomever they so direct, to get this information. Discovery Life will determine the information required, and the benefit payment will only take place when all the requested information has been received. For subsequent years of education, Discovery Life will require proof of enrolment, proof of fees and the previous year s education results. If there are no nominated child beneficiaries at the date of death or notified to Discovery Life within six months from date of death, no benefits will be admitted for payment. 10

12 Section 5 Income Continuation Benefit Benefit options have been added to the Income Continuation Benefit. These include the 100% upgrade on permanent disability, the Performance Bonus Protector, the Contribution Protector, and the Dynamic Spend Protector. 5.1 The Income Continuation Benefit The Income Continuation Benefit pays a regular income if the member experiences a loss of income after an injury or illness leaving him or her incapable of being able to perform the defined functions of his or her work. The benefit pays an income either until: the member has recovered sufficiently to return to work; or the member is no longer deemed disabled according to the definition; or death; or the member reaches the benefit expiry age. If a member s employment is dependent on him or her being in possession of a valid pilot s or driver s licence, no disability claim will be considered unless it renders him or her incapable of engaging in any occupation for remuneration or profit. 5.2 How is disability assessed? For an initial period of 12 months, the member will be assessed in terms of the effect that the disability has on his or her functionality. The assessment will take into account the reasonable continuity by which the member is no longer able to perform the material and substantial duties of his or her regular job with his or her own employer (including self-employment) or any other suitable job that the employer can offer in terms of the principles set out in the Labour Relations Act. Thereafter, Discovery Life will assess the member s disability based on his or her inability to perform with reasonable continuity the material and substantial duties of his or her own or any occupation with his or her own or any employer (this includes self employment), for which the member could reasonably be expected to be qualified for or suited to, taking into account the degree of disability as well as the knowledge, training, education, ability, experience and age of the member. Disability refers to injury, illness or disease that has resulted in a reduction in the member s functionality. All other alternatives resulting in a loss to access gainful employment or earn an income shall be excluded from this benefit, and includes retrenchment and redundancy. 5.3 How is the date of disability determined for the Income Continuation Benefit? The date of disability means the date upon which the member was last able to perform the material and substantial duties of his or her normal employment with his or her employer as medically assessed by Discovery Life, based on objective, recognised and valid medical evidence received. 5.4 A waiting period is applied before disability benefits are paid The Income Continuation Benefit commences after the member has been continuously disabled due to injury or illness for a certain period of time, after consulting a registered medical practitioner. This period is known as the waiting period. The waiting period may be one month, three months, six months or twelve months. Please refer to the benefit schedule for the waiting period that applies to members for the Income Continuation Benefit. If the member recovers or is rehabilitated and claim again for the same cause within three months of recovery, the waiting period will be waived for this subsequent claim. This is known as the off-period. The benefit payments are made on or before the last business day of each calendar month. Each monthly payment will be pro-rated according to that portion of the month for which the member qualifies for a benefit payment. The member s premium for the Income Continuation Benefit will be waived from the end of the waiting period until benefit payments stop. 11

13 Section 5 Income Continuation Benefit 5.5 There is a maximum income amount payable in the event of disability Subject to the benefit increase, Performance Bonus Protector and Contribution Protector described below, the monthly income amount paid on disability is subject to the overall maximum benefit limits set by Discovery Life. In addition, the income will be reduced by any earnings (excluding interest, rent and dividends) calculated on a monthly basis, received by the member, notwithstanding his disability. Discovery Life will be informed whether the member has any other disability benefits. All income disability benefits will be aggregated to ensure compliance with the maximum benefit levels determined by Discovery Life from time to time. If these maximums are exceeded, Discovery Life may adjust the amount payable under its benefit proportionately. Discovery Life will not incorporate the Capital Disability Benefit amounts into the disability aggregation benefit calculation. The income amount payable in the event of a member s disability is stated in the benefit schedule. 5.6 Are there any other factors that affect the monthly income amounts? When the member recovers and monthly income payments end, the Income Continuation Benefit amount will revert to the amount that would have applied if no claim had been admitted. In other words, it will revert to the originally selected Income Continuation Benefit amount and will be increased by the member s annual salary reviews for the benefit payment period. 5.7 Partial Disability Benefit A member will be eligible for a Partial Disability Benefit if: During the period of disability the member is capable of performing the functions of his or her own job or, as a result of rehabilitation practices, any other suitable job that his or her employer can offer, but the member s earnings are less than the benefit level selected. The member earns an income whilst eligible for a benefit payment in terms of the definition of disability. Calculation of the Partial Disability Benefit amount: Partial Disability Benefit = Income Continuation Benefit x (previous earnings current earnings)/ previous earnings. Previous earnings: member s monthly salary as at date of disability Current earnings: average monthly earnings from an alternative occupation and any monthly income received, or an amount that could be earned, based on the definition of disability. The previous earnings amount will be increased annually as follows: If the escalation in claim benefit was chosen the increase will be according to the escalation in claim benefit. If the escalation in claim benefit was not chosen the increase will be 75% of core CPI. A member must notify Discovery Life if he or she starts earning an income while a claim is in payment. If Discovery Life determines that it was not notified of this while a claim was in payment, Discovery Life may recover any amount that was paid in excess of the amount that would have been paid if the member had notified Discovery Life that he or she was earning an income. 5.8 How does the escalation in claim benefit work? Once the monthly income payments start, they will remain level unless the policyholder has chosen for it to increase annually in line with inflation. Please check the benefit schedule to see if this option has been selected. The policyholder can select the percentage by which the payments will increase annually. The options available are 0%, 3%, 5%, 7%, 7.5% or 10% subject to a maximum of core CPI. These increases will be effective after each 12-month period from the date at which benefit payments started. 12

14 5.9 Rehabilitation, re-skilling and retraining If, in the opinion of Discovery Life, the claimant is deemed able to be rehabilitated through retraining and/or reskilling, Discovery Life will request that the claimant undergoes rehabilitation. The purpose of the rehabilitation is to assist the claimant to achieve a level of performance to enable him or her to perform any gainful employment. Therefore, through rehabilitation, the claimant will no longer be considered disabled based on the definition. Discovery Life, in consultation with a board of medical professionals, will determine the feasibility of the rehabilitation programme. On acceptance of the programme, the claimant and the employer will be required to sign a written undertaking to indicate the claimant s genuine intent to follow the rehabilitation programme. The cost of the rehabilitation programme will be paid directly to the service provider by Discovery Life and will be limited to a maximum of the lesser of 24 times the monthly Income Continuation Benefit and R This benefit will end on the occurrence of the following: the member being deemed rehabilitated by Discovery Life, the claimant failing to comply with the requirements detailed in the rehabilitation programme, Discovery Life deciding in its own discretion that the rehabilitation programme is not effective How do income benefit payments affect the LIFE FUND? Benefit payments for the Income Continuation Benefit have no impact on the LIFE FUND When do Income Continuation Benefit payments terminate? The payment of benefits will be terminated in the following instances: if the member recovers from his or her disability and is able to perform his or her own job in the first 12 months if the member recovers from his or her disability and is able to start working in his or her own occupation or any reasonably suited occupation after 12 months as per the definition above if the member no longer suffers any loss of income from his or her occupation despite his or her disability if the member unreasonably refuses to undergo recommended medical treatment to reduce his or her disability if the member fails to provide Discovery Life with satisfactory proof of his or her disability within thirty (30) days of being requested to do so, and if he or she fails to submit to a physical examination and tests at Discovery Life s request and expense. If the member does not provide this proof, the payment of benefits will end if the member reaches the benefit expiry age as shown in the benefit schedule on the member s death How does tax affect the premiums and proceeds of the Income Continuation Benefit? Members may pay fringe benefit tax on the Income Continuation Benefit premium and should pay tax on the proceeds of the Income Continuation Benefit. Members are however advised to seek appropriate guidance from a tax professional or from their authorised financial services provider as to the correct tax treatment of the Income Continuation Benefit premiums and proceeds Upgrade for the Income Continuation Benefit The monthly Income Continuation Benefit for a member will increase according to the following calculation: Basic Income Continuation Benefit cover as per the current benefit schedule x 4/3 = upgrade if: The member enjoys the benefits under the Comprehensive Option; and The member has satisfied the criteria under Category A of the Capital Disability Benefit in Appendix 1. 13

15 Section 5 Income Continuation Benefit For example: If the member s benefit is set at 75% of his or her salary, the revised benefit will be 100% of salary. However if a member s basic benefit is less than 75% of salary, the upgraded benefit will be lower than 100% of salary. For example, if a member is receiving 60% of salary, the revised benefit will be 60% x 4/3 = 80% of salary. The same rule will apply to members receiving a partial benefit. The upgrade only applies to the basic Income Continuation Benefit cover. All other benefits such as Retirement Fund Waiver, Mortgage Protector and Dynamic Spend Protector are excluded from this benefit increase. Once an Income Continuation Benefit claim is in payment, the upgraded benefit will increase annually in line with the escalation rate selected by the group. The waiting period referred to in 5.4 above will be waived if a member qualifies for the upgrade. Should a member s cover be capped at the free cover limit, the total benefit payable including the upgrade will be capped at this level. For example, if a member s cover is capped at R50 000, the claim amount including the upgrade is capped at R The maximum monthly benefit including the upgrade is R The Contribution Protector If the member has qualified for the Income Continuation Benefit and: he or she enjoys the benefits of the Core Plan; or he or she enjoys the benefits of the Comprehensive Plan, but has not qualified for the Upgrade on the Income Continuation benefit; then the Contribution Protector will pay the member s premiums for the following Discovery products (if applicable) during the Income Continuation Benefit claim period: The Individual LIFE PLAN; The Discovery retirement Optimiser ; The Discovery Health Plan; Any Discovery Retirement Plan; Vitality; Contributions to other health plans or schemes will also be covered subject to the benefit maximums determined by Discovery from time to time. The Contribution Protector is separate from the Income Continuation Benefit payout. The Income Continuation Benefit claim period is only used to set a maximum timeframe for the consideration of payments of the Contribution Protector. This benefit will be paid for a maximum period of 12 months under the Core option and for a maximum of 24 months under the Comprehensive option. The Contribution Protector terminates if the member enjoys the benefits under the Comprehensive option and he or she qualifies for the upgrade for the Income Continuation Benefit. The total benefit is limited to 33% of the Income Continuation Benefit amount that the member is receiving What legal provisions apply to the Contribution Protector? Both the actively at work and the pre-existing conditions clauses automatically apply to the Contribution Protector. This is irrespective of whether Discovery Life has waived these clauses for other benefits. If the member has other individual or group life policies that also provide this kind of benefit, Discovery will reduce its benefit payments in the ratio of the potential Discovery payment to the total payment received from all other policies or contracts What about the tax treatment of the Contribution Protector premiums and proceeds? Members may pay fringe benefit tax on the Contribution Protector premiums and proceeds of the benefit may be taxed. Members are advised to seek appropriate guidance from a tax professional or from their authorised financial services provider for the correct tax treatment of the Contribution Protector premiums and proceeds The Performance Bonus Protector 14

16 5.17 The Performance Bonus Protector If the member has satisfied the criteria under category A of the Capital Disability Benefit in Appendix 1 and is a member of Vitality, a proportion of the member s past bonuses will be added to the monthly disability income. The payment is calculated with reference to: the average bonuses the member received over the three years before the admittance of the Category A claim under the Capital Disability Benefit; the bonus as a percentage of the members salary is capped at 50% on the Core option and 75% on the Comprehensive option. the member s Vitality status at the time of claim as per the following table: Vitality status at date of claim event Blue Bronze Silver Gold Diamond 10% 20% 50% 75% 100% For the purposes of this benefit, bonus is defined as participation in any incentive or bonus scheme that is paid in money, from time to time, at the discretion of the member s employer and is measured and paid in terms of published and defined criteria on the condition that the incentive is not an entitlement and not automatic. Participation in a scheme where a bonus is paid by way of share options and phantom share options are specifically excluded. Calculating the bonus percentage Consider a member earning the following income over the past three years: Year Basic Salary Bonus Bonus percentage 2006 R R % 2007 R R % 2008 R R % The average bonus would be calculated as (15% + 5% + 25%) / 3 = 15% (limited to 50% on the Core option and 75% on the Comprehensive option). Calculating the performance bonus amount Example 1: A member s monthly income is R27 500, Bronze Vitality status and Income Continuation Benefit is 75% of salary: Core: the monthly Performance Bonus Protector would be R x 15% x 20% = R825 Comprehensive: the monthly Performance Bonus Protector would be R x 15% x 20% = R825 Example 2: A member s monthly income is R27 500, Gold Vitality status and the benefit is 75% of salary. This member has received bonuses equal to 100% of salary over the past three years. Core: the monthly Performance Bonus Protector would be R x 50% x 75% = R Comprehensive: the monthly Performance Bonus Protector would be R x 75% x 75% = R The Performance Bonus Protector is paid for a maximum of 24 months. Members that have not earned past performance bonuses for whatever reason will not qualify for this benefit. This rule will apply even if a member has recently joined a performance incentive scheme but has not yet received a performance bonus. Similarly, employees in their first year of work will not qualify for this benefit. The average bonus will be calculated over a three-year period even if the member did not receive bonuses in some of these years. This rule will apply even if a member has taken a sabbatical year. The benefit will be paid monthly regardless of the frequency of the performance bonus. The onus will be on the member to prove past bonuses. 15

17 Section 5 Income Continuation Benefit 5.18 The Dynamic Spend Protector If a member has satisfied the criteria under Category A of the Capital Disability Benefit in Appendix 1, has Vitality membership and a DiscoveryCard, the savings from partner stores will be increased under this benefit. The Dynamic Spend Protector is separate from the Income Continuation Benefit payout. The Income Continuation Benefit is only used to create the event for the payment of the Dynamic Spend Protector. The Dynamic Spend Protector is based on the following: The DiscoveryCard partner spend in claim, used to determine the DiscoveryCard cash backs (subject to the DiscoveryCard limits and conditions at the date of claim) and limited to a maximum of the DiscoveryCard partner spend in the 12 months before the disability event (escalating with inflation each year). Spend on the DiscoveryMotor card in claim and limited to a maximum of the DiscoveryMotor card spend in the 12 months before the disability event (escalating with inflation each year). Your Vitality status at the time of the claim event. The Dynamic Spend Protector Booster percentage, as determined by the following table: Vitality Status at date of claim event Blue Bronze Silver Gold Diamond 5% 7.5% 10% 15% 20% 5.19 How is my Dynamic Spend Protector boost determined? The monthly Dynamic Spend Protector boost is determined by multiplying the applicable Dynamic Spend Protector Booster percentage by the DiscoveryCard partner spend and DiscoveryMotor card spend (as defined above). Policyholders who do not have a DiscoveryCard at least 12 months before the disability event will be eligible for only 50% of the above Dynamic Spend Protector Booster percentages, subject to a monthly maximum spend of R1 500, increasing annually by inflation, at partner stores (including DiscoveryMotor card spend). The benefit is available on all DiscoveryCards, including the debit card. These discounts are in addition to the normal DiscoveryCard discounts for partner stores. The Dynamic Spend Protector benefit will cease on the earlier of: The selected expiry age of the disability benefit Death Cancellation of the DiscoveryCard account. Please note: The benefit is only payable on spend at DiscoveryCard partners while disabled and is only applicable to the spend of one DiscoveryCard account. You can only receive the Dynamic Spend Protector on one benefit, for example if you are eligible for the Dynamic Spend Protector on both the Individual Life and the Group Life benefit, the Dynamic Spend Protector will apply to the benefit with the higher discount. If you are not a member of Vitality, you will receive the equivalent benefit of a claimant on Blue Vitality status. Example A member spends R2 500 at our partner stores and was on a Silver Vitality status at the date of disability or claim. The monthly benefit will be increased by R2 500 x 10% = R250 in that particular month. Members that don t have a DiscoveryCard for at least 12 months before the disability event will be eligible for only 50% of the above discounts. The benefit is only available at DiscoveryCard partner stores. 16

18 Section 6 Capital Disability Benefit 6.1 What is the Capital Disability Benefit The Capital Disability Benefit pays a capital amount in the event of the member or spouse being medically impaired to a degree that they are unlikely to be able to generate an income. This medical impairment may be permanent or temporary. 6.2 How is the date of disability determined for the Capital Disability Benefit? Discovery Life will determine the date on which the life assured became disabled on the basis of objective medical evidence. This date is referred to as the date of disability. The disability benefit will not become payable if the date of disability occurs before the life assured becomes eligible for a disability benefit or after the life assured ceases to be eligible for a disability benefit. 6.3 How does Discovery Life assess qualification for a benefit payment? The Capital Disability Benefit is assessed on the severity of the medical impairment no matter what work is performed to generate an income. By focusing on the effect of the medical impairment on lifestyle and the ability to generate and maintain an income, rather than on whether or not the impairment affects a specific occupation, Discovery Life has developed an evaluation system that is objective and fair. We have developed detailed protocols that describe every anatomical and physiological system disorder in the body using strict medical criteria. This allows us to be completely objective when evaluating the claims. Please refer to Appendix 1 for these protocols. 6.4 What benefit payments are made through the Capital Disability Benefit? The Capital Disability Benefit provides a lump sum payment in the event of a medical impairment in terms of the assessment protocols in Appendix 1 of the Group Risk LIFE PLAN Guide. The lump sum benefit is defined as a multiple of salary and expressed as a percentage of the LIFE FUND. Benefit payments will reduce the LIFE FUND. Example: a member is provided with a Capital Disability Benefit which is equivalent to twice their annual salary. The member has a LIFE FUND of four times annual salary. Thus the Capital Disability Benefit is equivalent to 50% of the LIFE FUND. 6.5 An objective and fair system is used to assess the severity of the disability Payments are evaluated on how severely the disability affects the life assured and, ultimately, his or her ability to maintain his or her income. This benefit rates severity in two categories: Category A Pays 100% of the benefit if the disability satisfies the criteria for Category A. These criteria are designed to establish whether the disability causes the life assured to suffer a permanent loss of income. Category B Pays 50% of the benefit if the disability satisfies the criteria for Category B. These criteria are designed to establish whether the disability causes the life assured to suffer a partial loss of income on a permanent basis. Should the employer s industry or the member s or spouse s occupation or pastime pursuits change, it is important that Discovery Life is informed of such a change to ensure that the member or spouse remains covered at all times. Please refer to Appendix 1 for details on how the criteria used to establish severity ratings will determine which category will apply. 17

19 Section 6 Capital Disability Benefit The benefit cover is defined as a multiple of the member s salary (expressed as a percentage of the LIFE FUND), subject to the benefit maximums determined by Discovery Life from time to time. Example: a member has a Capital Disability Benefit equivalent to 50% of his or her LIFE FUND. The member is assessed as having a Category B severity claim. The benefit amount payable will be calculated as follows: Benefit amount = Severity level percentage x (benefit expressed as a % of LIFE FUND x LIFE FUND) = 50% x (50% x LIFE FUND) 6.6 The effect of a benefit payment through an approved fund Where the policyholder of the Group Risk LIFE PLAN is an approved fund, the member must be informed that to receive a Capital Disability Benefit, he or she will be required to retire from the fund. The member will not be able to receive the benefit if he or she remains a member of the approved fund. 6.7 Specific medical impairments that qualify for a benefit payment Below is a brief description of the various medical impairments for which claims may be made. Please refer to Appendix 1 for detailed medical descriptions. Because a medical specialist must be involved in diagnosing and submitting any claim, specific protocols for each disability claim will be sent to the specialist who treats the life assured at the time of claim. The treating specialist will, in conjunction with the Discovery Life medical panel, decide on the permanency of the condition. Cardiovascular system Diseases of the heart often result in an inability of the left ventricle to function properly. This means that blood cannot be pumped through the body and it therefore accumulates in the left ventricle and lungs, leading to heart failure. In the more severe cases this leads to severe shortness of breath and fatigue. At this point it becomes extremely difficult to perform any work, and so Discovery Life would pay out a disability benefit based on the criteria constituting chronic heart failure. In the early stages, heart failure can respond very well to adequate treatment and the inability to work is therefore only temporary. The aim of this benefit is to cover the total inability to do any work, but Discovery Life will start payment (Category B 50%) when it appears that the condition is not responding to treatment adequately and that going to work is becoming an effort. In other words, Discovery Life tries to pay you when, on medical grounds, it is better for you not to go to work any longer. Part of the cardiovascular system is the vessels, both arteries and veins. Therefore hypertension (high blood pressure) falls into this system. The majority of people with hypertension are able to work and function in a normal capacity with or without treatment. This disability product is therefore designed to pay when the hypertension has caused major complications in the heart, kidneys or eyes, despite therapy. Peripheral vascular disease means that either the arteries cannot get blood from the heart to a certain area, normally the legs, or the veins cannot get blood from an area back to the heart. If an artery is involved, then there is normally severe pain with exercise and cold extremities (cold hands or feet) leading eventually to amputation, as the area not supplied with blood dies. When veins are involved, blood pools in the area where veins are diseased, resulting in widespread ulceration which does not heal. The most common area for both of these diseases to occur is the legs and therefore working eventually becomes impossible. We have categorised by strict medical criteria the time when working would become inadvisable. 18

20 Respiratory system Many diseases affect the lungs resulting either in an inability to breathe air in, or to breathe air out or a combination of both. Permanent breathing difficulties normally take many years to develop and, until a terminal point is reached, medication can usually help. Testing the functioning of the lung can range from a simple breathing into a peak flow meter to a full battery of tests, including an arterial blood test. These test results can also vary, depending on the type of medication used. There is normally an ability to work until certain parameters of the lung function fall below certain limits. Discovery Life has documented these limits based on worldwide acknowledged standards. Because of the variability of results, we also request that before claiming, these tests be done three times, at least three months apart, to ensure consistency and permanency. Medication should continue to be used during this time, and before testing as well. Mental and behavioural disorders Psychiatric illness is one of the most difficult areas to assess when it comes to disability. Often medication can alleviate the symptoms of any particular disease process, but with drugs that affect the brain, many side effects can occur. The Association for Savings and Investment South Africa has established a protocol for assessing depression with regard to disability and those criteria therefore form part of our categorisation. Because of the combined problems of both the disease process and the medication side effects, we look at the total functioning ability of the person. We use the Activities of Daily Living test, which is an objective measurement of a person's ability to carry out normal functions. The assessment in this very subjective group of diseases becomes far more objective and fair to you. Nervous system Illnesses that affect the brain, nerves or muscles can cause either complete or partial incapacity. This group of illnesses includes the inability to speak, see, think, hear, walk, move or control basic bodily functions. Most of these illnesses can be assessed with strict screening tests, for example sight or hearing tests, but others are more subjective. In the latter case, Discovery Life will again use the Activities of Daily Living test to assess permanent inability to maintain an income, for example, the inability to communicate, loss of memory and impaired locomotion. Digestive system The digestive system consists of the upper and lower gastrointestinal tract as well as the liver, pancreas and gall bladder. Severe diseases that affect this system result in the inability to carry out primary bodily functions, hence affecting the ability to maintain an income. Permanent incontinence or disturbance in bowel function that is untreatable is not compatible with working, irrespective of the type of work. Multiple nutritional disorders often accompany these disorders as well. Chronic liver disease and diseases of the biliary system can cause ongoing multiple dysfunction of the gastrointestinal system as well as the brain. This end-point is normally reached many years after diagnosis and so there is an ability to work up to a point. Again, as with our other definitions, Discovery Life has defined the point when the medical impairment is incompatible with working. Renal system This benefit will pay out when the kidneys are permanently unable to function normally and constant dialysis, either peritoneal or haemodialysis, is needed. Acute renal disease is not covered for disability as, by definition, the kidney failure is fully treatable and a normal life can be followed after recovery. Permanent dialysis normally indicates a great sacrifice of time and, although there is apparent normal function immediately after dialysis, this treatment is so frequent that there is no time or ability to hold down any type of job. Discovery Life acknowledges this and will therefore pay out this benefit when the kidneys are not functioning well enough so that constant dialysis is needed. Again, these levels have been defined. 19

21 Section 6 Capital Disability Benefit Endocrine system The only disorder in the endocrine (hormone) system that would cause severe enough medical impairment to warrant a claim for disability is diabetes mellitus. Both insulin and non-insulin dependent diabetes mellitus can eventually lead to severe complications in both the kidney and eyes. These parameters are easily and objectively measurable and therefore Discovery Life has set out specific parameters for claiming. Any other endocrine disease that might result in a permanent disability would be paid under the appropriate body system that has been affected. Cancer Although cancer is a disease group and not a system, because the implications of cancer extend over many anatomical and physiological systems, it is preferable to assess these claims in their own right. Obviously, people falling into the terminal and more severe stages would be unable to work, and would be paid out 100% (Category A). Discovery Life acknowledges, however, that even during the earlier stages of cancer, intensive and ongoing treatment might be needed that alters the ability to continue with your job at that time. In such cases a 50% benefit payment (category B) may be made. Musculoskeletal system Disability claims relating to diseases of the muscles, joints and bones are notoriously difficult to assess and normally rely on the subjective opinion of the claims assessor. Discovery Life has attempted to make these claims as objective as possible with the use of specific examining protocols for each area. A differentiation between manual and sedentary labour will be made in this group with regard to functional ability should the non-dominant or dominant side be injured. This system is divided into disorders of the hands, upper limbs, lower limbs and spine. The inability to maintain an income is based on the severity of any abnormal movement of any joint or limb, amputation, damage to vessels, joint destruction, loss of bowel or bladder function or complete sensory loss of any of these areas. We are therefore able to objectively assess the impact on working when a part of the musculoskeletal system has become diseased or injured and to make a benefit payment accordingly. Other This category caters for any diseases that may not fall into any of the systems above, but might still permanently incapacitate enough to warrant a disability benefit. A person with a combination of symptoms and signs that do not qualify under any one system, but where working is no longer an option can therefore claim under this category. The Activities of Daily Living test is used in these cases to determine the level of disability. Other disorders that are specially mentioned here would be diseases where entire treatment has failed (for example ongoing generalised epileptic attacks or where treatment prevents earning an income, such as ongoing transfusions for certain blood disorders). 20

22 Section 7 Severe Illness Benefit 7.1. What is a severe illness? A severe illness is an illness or disorder that significantly affects a person s lifestyle What benefit payment is provided by the Severe Illness Benefit? The Severe Illness Benefit provides a lump sum payment to an insured member who is diagnosed with one of the defined severe illnesses listed in Appendix 3 of the Group Risk LIFE PLAN Guide. This lump sum payment provides the necessary financial assistance to ensure that the insured member s lifestyle can be maintained after a life-changing event. The lump sum benefit is defined as a multiple of salary and expressed as a percentage of the LIFE FUND or IMPAIRMENT FUND. Benefit payments will reduce the LIFE FUND and IMPAIRMENT FUND. Example: a member is provided with a Severe Illness Benefit which is equivalent to two times annual salary. The member has a LIFE FUND of four times annual salary. Thus, the Severe Illness Benefit is equivalent to 50% of the LIFE FUND What is an IMPAIRMENT FUND? The Severe Illness Benefit reduces the LIFE FUND in the event of a claim. However, the Severe Illness Benefit may be selected as a standalone benefit. In this case, the IMPAIRMENT FUND becomes the financial mechanism of the Group Risk LIFE PLAN and is used to fund Severe Illness Benefits. The IMPAIRMENT FUND operates in the same way as the LIFE FUND, except that it may only be reduced by severe illness claims. All other features applicable to the LIFE FUND are also applicable to the IMPAIRMENT FUND. This includes the Minimum Protected FUND and Vitality How are the severe illnesses categorised? Discovery Life s Severe Illness Benefit covers a wide range of medical conditions from life-changing events to terminal illness. This benefit is family focused and allows the selection of the Severe Illness Benefit to suit the member s and the family s needs. The Severe Illness Benefit provides cover for all of the following: Heart and Artery Benefit Cancer Benefit Nervous System Benefit Respiratory Diseases Benefit Gastrointestinal Benefit Urogenital Tract and Kidney Benefit Connective Tissue Diseases Benefit Advanced AIDS/Accidental HIV Benefit Eye Benefit Ear, Nose and Throat Benefit Endocrine and Metabolic Diseases Benefit Musculoskeletal Benefit. 21

23 Section 7 Severe Illness Benefit 7.5 How the severity levels affect benefit payments The Severe Illness Benefit has been designed so that benefit payments are proportional to the severity of the illness itself. The assessment of the severity levels that applies to specific medical conditions are detailed in Appendix 3 and is based on objective medical definitions. There are seven severity levels used to determine benefit payments. These levels have been set to ensure that benefit payments provide adequate cover for the impact that the severe illness is expected to have on the member s lifestyle. The severity levels are as follows: Severity level A: Severity level B: Severity level C: Severity level D: Severity level E: Severity level F: Severity level G: Comprehensive A-D Pays 100% of the benefit cover Pays 75% of the benefit cover Pays 50% of the benefit cover Pays 25% of the benefit cover Pays 15% of the benefit cover Pays 10% of the benefit cover Pays 5% of the benefit cover Comprehensive PLUS Benefit A-G Cover may be selected for severity levels A-D (Comprehensive) or severity levels A-G (Comprehensive PLUS). The Severe Illness Benefit is defined as a multiple of the member s salary (expressed as a percentage of the LIFE FUND), subject to the benefit maximums determined by Discovery Life from time to time. Example: a member has a Severe Illness Benefit equivalent to the 50% of his or her LIFE FUND. The member is diagnosed with stage 2 cancer (Severity Level C). The benefit amount payable will be calculated as follows: Benefit amount = Severity Level percentage x (benefit expressed as a % of LIFE FUND x LIFE FUND) = 50% x (50% x LIFE FUND) 7.6 How many benefit payments can be made under the Severe Illness Benefit? The Severe Illness Benefit does not fall away after the first benefit payment. As long as there is sufficient LIFE FUND or IMPAIRMENT FUND remaining to fund additional benefit payments, multiple claims are allowed as follows: The member may claim subsequent benefit payments for any life-changing event covered irrespective of: the body system claimed for with any previous benefits payments, whether the same body system or a different body system. whether the severity of the subsequent claim is higher, lower or equal to the severity of the previous claim. You may qualify for multiple claims within or across any body systems as a result of the same life-changing event. In this case, the claim with the highest severity would be paid first, with a second claim being paid six months later, provided that the second disease process is still present at the time. An example would be paraplegia and kidney failure as a result of a motor vehicle accident. Once you have satisfied the criteria for a subsequent benefit payment, the amount of the benefit payment is determined by whether the illness is of a progressive nature or is a new life-changing event. 22

24 Progressive illnesses: At the time of the first claim, Discovery Life will evaluate the severity of the illness according to the severity rating scale defined in Appendix 3. If the illness becomes more severe at a later date, Discovery Life will reassess its severity rating. If the severity of the illness increases, an additional payment will be made for the difference between the lower and increased severity rating. For example, stage 1 cancer is classified as Severity Level D, while stage 2 cancer is classified as Severity Level C. Therefore, 25% of the benefit will be paid for stage 1 cancer and then an additional 25% of the benefit will be paid when stage 2 cancer occurs. Should the illness progress from one severity to a higher severity within a 90-day period, the additional benefit payment will place the member in the same financial position in which he or she would have been, had the original benefit payment been assessed on the higher severity level. Examples of illnesses that are often progressive include cancer, many of the chronic neurological diseases (for example multiple sclerosis), many of the connective tissue diseases, chronic lung diseases (for example emphysema), chronic liver diseases, progressive blindness or deafness and chronic kidney diseases. New life-changing event: A subsequent claim may occur which is not regarded as a progression of previous claims. In this case, the benefit payment for the subsequent claim will be treated independently of any previous claims. The benefit payment will be based on the full severity level of the subsequent claim and not the difference in severity level between the subsequent claim and the previous claim. Example: if you have a heart attack at Severity C (50%), followed later by a subsequent heart attack at Severity B (75%) where the second claim is not a progression of the first claim, the benefit payment for the second claim would be 75% and not the difference in severity between the first and second claims (75% minus 50%). Note that the same rules are applied in assessing multiple claims for the Capital Disability Benefit. The medical definitions for each severity level are documented in Appendix 3. The severity levels are judged using objective medical criteria provided by the member s treating specialist. The Discovery Life medical panel in conjunction with the treating specialist will determine the severity level. 7.7 When the Severe Illness Benefit terminates The Severe Illness Benefit terminates at the earlier of the member reaching the benefit expiry age, or age 65. This means that claims submitted before the benefit expiry age will be assessed and paid, but claims after the benefit expiry age will not be accepted. Premiums will not be charged for the Severe Illness Benefit after the member reaches the benefit expiry age. 7.8 Other factors that influence the Severe Illness Benefit Discovery Life assesses the risk and sets the member s and spouse s Severe Illness Benefit premium according to the information supplied on the Group Risk application form and at the request for medical evidence. This information includes the industry of the employer, the expected occupation and the pastime pursuits of the member or spouse. If the employer s industry or the life assured s occupation or pastime pursuits change, it is important that Discovery Life is advised of such change to ensure that the life assured remains covered at all times. 7.9 How these severe illnesses are defined The following descriptions are an easy guide to what your benefits cover and are not the legal definitions that claims are assessed on. The latter can be found in Appendix 3. 23

25 Section 7 Severe Illness Benefit Heart and Artery Benefit The cardiovascular system is made up of the heart and vessels (arteries, veins and capillaries). One of the major causes of both death and incapacity worldwide is heart attack. A heart attack occurs when an area of the heart muscle dies due to a clot or spasm in the artery that supplies that area of muscle. If a blocked or partially blocked cardiac artery is found early enough, treatment can be instituted to try and prevent the heart attack from happening. This is done either by replacing the blocked artery (cardiac artery bypass graft or CABG) or by placing a catheter into the blocked artery and expanding a balloon, squashing the atheroma and opening the artery (angioplasty). Occasionally, if this alone doesn t work, a stent is placed into the artery to keep it patent (angioplasty with stent). The latter is done with minimal hospital stay, whereas a CABG involves opening the chest with subsequent ICU and prolonged hospital stay. The outcome of these procedures depends on the amount of damage done to the heart muscle as well as the number and position of the arteries that are blocked. The ability of the heart to pump is measured as a percentage that is known as an ejection fraction (EF). Any ejection fraction above 55% is considered a normal heart. Prognosis is directly related to the ejection fraction and is the primary measure used by Discovery Life to assess severity levels for this benefit. The heart also has valves within it to prevent backflow of blood as well as a lining for protection (pericardium). Diseases that affect these areas can also affect performance of the heart and result in a decreased ejection fraction. Surgery is often performed at early stages in the disease process of both valves and pericardium to prevent permanent cardiac damage. Today s advances in medicine also allow surgery on these areas to be done through a fibre optic scope, thereby aiding recovery and reducing complications. Most severe illness benefits exclude this type of surgery, but the change in lifestyle and the risk of mortality is still present, although to a lesser degree. Discovery Life pays out a benefit if keyhole surgery is performed. Keyhole surgery is defined as surgery done by using a fibre optic scope that would otherwise be performed through an open chest. Nerves that supply the heart play an important role in that they are responsible for maintaining the regular beat of the heart. These nerve pathways can occasionally run in aberrant areas or they can fire erratically causing arrhythmias or abnormal heart beats. This can affect either the atria (for example, atrial fibrillation) or ventricles (for example, bundle branch blocks). Depending on the degree of aberration, lifestyle can be severely affected. Treatment involves medication or surgery to the affected nerve pathways. Occasionally, treatment doesn t work and lifestyle must be modified to prevent the risk of strokes. Arteries are blood vessels that carry oxygenated blood away from the heart. They can be small, medium or large in size depending on the area that they are supplying. Medium and large arteries can form sacks called aneurysms. If these aneurysms are in large arteries such as the aorta, and they rupture, death can occur in more than 80% of cases. Once an aneurysm is found, surgery is often advised once it reaches a certain size. The mortality rates for certain aneurysms are high, both with and without surgery. The severity levels on this benefit are paid out according to the effect that any disease has on lifestyle, with or without treatment. Cancer Benefit Cancer occurs when cells in the body start to divide abnormally. These abnormal cells then take over normal cells and stop their functioning. Cancer can occur in any area of the body and is graded according to how far the abnormal cells have spread. Cancer that is localised in one part of the body would be a stage 1 cancer, while cancer that has spread all over the body would be a stage 4 cancer. 24

26 Due to these stages being directly linked to the intensity of the treatment and the likelihood of eventual survival, Discovery Life s severity ratings are linked to the stages of cancer. If you are in stage 1, your potential for being cured is greater than that of a person in stage 4 and therefore your benefit payment would be smaller. Additional diseases have been added to this benefit as the impact and treatment of these diseases would be the same as for cancer. Destruction of bone marrow can occur without leukaemia being present, but the implication and treatment for this condition is similar to leukaemia. A benefit is paid for this pre-cancer condition. Some skin cancers such as basal cell carcinoma and squamous cell carcinoma are completely curable by removal of a small area of skin. When these lesions are large and affect wide areas of skin, especially on the face, lifestyle is affected and a payment will be made. The same would apply when certain areas of tissue are removed to prevent cancer, for example, the removal of a breast because of an increased risk of cancer. There are two classes of brain tumour, namely benign (non-cancerous) and malignant (cancer). Although benign brain tumours are not cancers by definition, they can have profound side effects and complications related to the site of the tumour and the pressure effects on the surrounding tissue and can therefore become as life-threatening as any cancerous tumour. Discovery Life has rated the severity of these tumours based upon the ability to treat them, as well as the possible complications of being unable to treat them. nervous System Benefit This benefit covers any illness or damage that affects the brain, nerves, spinal cord, and arteries that supply the nerves and brain, or neuromuscular (nerve/muscle) junctions. Disorders of this system are often untreatable and can result in major life changes either over time or acutely. Rupture of arteries that supply the brain result in strokes or death of brain cells. The amount of brain cells affected is dependent on the size of the artery and site that the artery supplies. Severities of stroke are graded according to the amount and permanency of the damage. Changes in receptor site or abnormal release of neurotransmitters at any site within the nervous system can result in changes in neurological behaviour. In most cases the changes are slow and progressive and would include diseases like Parkinson s, myasthenia gravis, motor neuron disease, Alzheimer s disease and multiple sclerosis. The severity levels for these diseases are mostly based on progression of the disease from diagnosis to loss of function for example paraplegia, and ultimately to death. In other instances, these changes may occur suddenly in response to trauma, infections or metabolic problems resulting in a coma. The coma can last from a few days to many years. The severity of the state of the coma is largely determined by the number of days or weeks that the coma persists. Brain tumours are unique in that they are confined to an area within the skull and do not spread to other parts of the body. This benefit also covers other neural infections, trauma and treatments that affect lifestyle either on a permanent or prolonged basis. Respiratory Disease Benefit The lungs are essential organs because they allow oxygen to enter the bloodstream as well as carry toxic carbon dioxide out of the body. 25

27 Section 7 Severe Illness Benefit Impairment of lung function alters the ability of every cell in the body to carry out its function adequately. Pollutants that are inhaled as well as infection, blood clots and diseases can destroy lung tissue. Most lung disorders become more severe over many years with progressive worsening of symptoms, which includes the inability to breathe with movement, right heart failure and eventually bilateral heart failure. An exception is a pulmonary embolus that blocks the bloodstream to an area of lung tissue which then rapidly dies (similar to a heart attack). Discovery Life recognises that cancer of the lung is only one area of respiratory disease and is offering this severe illness product to cater for lung diseases once life-changing damage has set in. The severities are based on the inability of the lung to function adequately enough to allow for a normal lifestyle. Gastrointestinal Benefit The gastrointestinal tract is made up of the oesophagus, stomach, duodenum, small bowel, large bowel, liver, biliary system (including gallbladder) and the pancreas. The function of this system is to process and metabolise the food we eat so that we can use the nutritious parts of the food and eliminate the balance as waste. An injury or insult to this finely balanced system results in toxins being built up in the body or a deficiency of essential nutrients that are necessary to maintain body function for example, minerals, vitamins and trace elements. Most people experience a malfunctioning of this system at some stage of their lives, either through infection, surgery or trauma, but these episodes are normally reversible and the body reverts back to its regular functioning. Certain disease processes result in permanent changes to the gastrointestinal system that can alter the lifestyle of the affected individual permanently. The symptoms related to these diseases can range from mild nausea to incapacitating hepatic encephalopathy. The treatment of most gastrointestinal diseases is either through the prescription of medicines to alleviate and control symptoms, or surgery to remove an area of the affected bowel. The latter can result in a colostomy or ileostomy where a section of the bowel is removed and an artificial opening is made in the remaining bowel and then brought to the surface of the abdomen for evacuating the bowels. This can be temporary or permanent. In the case of a permanent colostomy, although the diseased bowel is removed, the life-changing impact of living with a colostomy bag is recognised. Discovery Life offers this benefit to cater for diseases of the whole gastrointestinal tract that can cause continuous hospitalisations from lack of medical control, to terminal changes in organs that perform a vital physiological function. Urogenital Tract and Kidney Benefit This benefit covers diseases and disorders that affect the kidneys, bladder, urethra as well as the male and female reproductive organs. The kidneys are essential for secreting waste products and maintaining fluid balance within the body. Any failure in these organs, either acute or chronic, will result in toxin build-up, eventually leading to death. Dialysis through blood (haemodialysis) or the abdomen (peritoneal dialysis) is often the only way to treat damage to the kidneys. This can be either acute, where the damage is reversible, or chronic, where the damage is irreversible. The latter is often used to keep the patient alive until a suitable donor for kidney transplant can be found. A disorder affecting females that is covered under this benefit is the presence of fistulae. These are tracts that form between the vagina, rectum or bladder causing mixing of material from each of these areas. The treatment of fistulae is difficult and can have an impact on lifestyle for years. 26

28 The male reproductive organs include the testes, prostate gland and penis. Any injury or loss of function to any of these areas can result in infertility or loss of sexual function Discovery Life acknowledges the life-changing impact of this and offers a benefit to cover these diseases and disorders. Connective Tissue Diseases Benefit This is a group of autoimmune illnesses that cause the body to attack its own joints, vessels or tissues. The effect can range from being mild and controlled on special medication to completely debilitating. The illnesses that Discovery Life covers under this benefit include: Progressive systemic sclerosis, where fibrosis of skin and organs occurs, eventually resulting in kidney failure. Rheumatoid arthritis, where the body attacks its own joints, causing progressive debilitation (this is a separate illness to the more common osteoarthritis). Systemic lupus erythematosis, where an inflammation of the blood vessels occurs, causing damage in many organs. Sarcoidosis, where lumps of tissue are deposited around the body, causing damage in areas where the deposits occur. Polymyositis, where weakness occurs in various muscle groups, causing multiple areas of debilitation. Giant cell arteritis, where there is inflammation and damage to blood vessels of the head causing symptoms ranging from headaches to major neurological damage. Wegener s granulomatosis, where there is chronic inflammation in blood vessels causing cell aggregation in areas such as the nose, lungs and kidneys, causing damage to these areas. Polyarteritis nodosa, where there is destruction of blood vessels and aneurysms form causing damage that affects multiple organs. Ehlers Danlos syndrome, where there is abnormal connective tissue causing hypermobility of joints, hyper elastic skin and rupture of organs and vessels. The severity of these illnesses is dependent on the number of organs and areas involved, equating to the degree of debilitation. advanced AIDS/Accidental HIV Benefit Acquired Immunodeficiency Syndrome (AIDS) occurs when the human immunodeficiency virus attacks the immune system so it cannot fight infection. Advanced AIDS occurs when the body does not have enough CD4 cells to fight off infection and certain opportunistic illnesses associated with this stage of the illness. The signs and symptoms of these illnesses are listed in Appendix 3. Due to the severity and poor prognosis of advanced AIDS, a 100% benefit payment is made. Payments are also made should the HIV virus be contracted from a needlestick injury (applies to medical and paramedical professions only), rape, infected blood transfusions and organ transplants where the new organ was infected with the virus. In all cases, certain protocols must be met as defined in Appendix 3 before a payment will be made. 27

29 Section 7 Severe Illness Benefit Eye Benefit Sight is an essential part of daily functioning. Complete blindness, partial loss of sight or progressive loss of sight can alter lifestyle dramatically. Therefore, Discovery Life has aimed to cover a much wider spectrum of disorders affecting the eye. This means that if vision slowly deteriorates, staggered benefits can be paid out to cater for the changes that have to be made. This benefit not only covers diseases of the eye itself, but also disorders that can affect the nerves supplying the eye. Ear, Nose and Throat Benefit This benefit covers disorders or diseases that affect hearing, smell and balance related to the sinuses, ear or the nose. Hearing is dependent on adequate nerve input into the ear as well as normal anatomy of the outer, middle and inner ear. Any disease or disorder that affects any of these components can then result in either a loss of or decrease in hearing or a severe alteration in balance. If the loss of hearing, either partially or totally, is permanent it can greatly affect lifestyle. Major diseases of the sinuses and nose can affect smell, physical appearance or balance and are also covered under this benefit. Musculoskeletal Benefit This benefit covers major damage to or diseases that affect either muscles, bones or joints. Amputation of any area of the body or disease or accident resulting in the loss of use of a limb is not only psychologically traumatic, but can have major lifestyle implications as well. The impact can be less severe, as with the loss of use of a single finger, or extremely severe, as with the loss of use of an arm, hand or leg. The severity levels are indicative of these various grades of lifestyle changes. Major trauma to the facial bones as well as the necessity for cervical traction after trauma is also covered under this benefit. Cervical traction following trauma has a major lifestyle impact for the duration of the traction, but subsequent to this, restrictions are necessary to avoid further cervical damage. A severe illness payment is warranted. Other restrictions on lifestyle due to musculoskeletal disorders that are covered by this benefit are joint replacement, Paget s disease (a metabolic bone disease that results in abnormal bone growth in various sites around the body), polio, major body surface area burns and chronic bone infection. Endocrine and Metabolic Diseases Benefit The endocrine and metabolic systems are essential for the maintenance of body physiology as well as fine-tuning of various body functions. The endocrine system, including the pituitary, thyroid, adrenal and parathyroid glands as well as gonads ensure that multiple functions (reproduction, temperature control, growth, cell nutrition, cortisone production, blood pressure etc) are controlled according to a fine balance. Metabolic functions assist in this balance by providing for cell nutrition and functioning at a biochemical level. Should any of these essential functions become impaired, either an acute crisis (for example extremely raised blood pressure) that can be life-threatening, or a slow progressive disease with multiple complications (for example impaired growth) can occur. Discovery Life now offers a benefit that covers severe abnormalities in the functioning of these essential physiological moderators that affect lifestyle. 28

30 7.10 What is the Child Severe Illness Benefit? If the member or spouse is covered for the Severe Illness Benefit, an amount of severe illness cover is automatically included for the children. The automatic cover for each child in the family is provided free of medical underwriting, but excludes pre-existing medical conditions that the parent(s) knew about or for which they sought medical attention in the past. This cover expires when the child reaches the age of 18. To qualify for a benefit payment the child must be the biological child of the assured life or must have been legally adopted. A claim for any child is limited to 10% of the parent s aggregate sum assured for the Severe Illness Benefit, up to the Discovery Life Group Risk benefit limit per claim event. These claims have no impact on the LIFE FUND. In keeping with our philosophy of covering the entire family for any major life-changing events, we have developed a benefit that covers any severe illness that affects children. If your child becomes ill, instead of having to focus on financial problems, you can care for your child. Under this benefit, Discovery Life covers all body systems included in the main Severe Illness Benefit, including organ transplants, abnormalities of the heart requiring major surgery, severe brain damage following trauma, as well as some severe infections that permanently affect the child. The Activities of Daily Living measure of the Severe Illness Benefit does not apply to the assessment of claims for the child Severe Illness Benefit. If parents are insured on various Group Risk LIFE PLANS and Individual LIFE PLANS that qualify for the child Severe Illness Benefit, in the event of a claim, only one benefit will be payable: the highest benefit will be paid. If simultaneous claims arise for a child under the Group Risk LIFE PLAN and the Individual LIFE PLAN, only one benefit payment will be made: the higher of the two benefits will be paid Global Treatment Benefit The Global Treatment Benefit is automatically included in the Severe Illness Benefit and provides the member with access to a range of hospitals (in the USA) included in the hospital network used by Discovery Life at the time. If a claim arises under the Severe Illness Benefit, the member may choose whether to have their medical treatment performed in South Africa or at the network of hospitals in the USA. This choice, which effects their benefit payment amount, is defined in Option 1 and 2 described below: Option 1: The member chooses to have all treatment performed in South Africa The member will receive the normal benefit payment amount defined under paragraph 7.5, which is dependent on the severity of the illness. Option 2: The member chooses to have treatment in the USA The member will receive the following benefit payment: A lump sum equal to 80% of what they would have received under Option 1 PLUS An amount equal to the actual cost of the treatment at the overseas facility, subject to a maximum of the benefit amount that would have been paid under Option 1, less a deductible, which is defined as the amount payable by Discovery Health, had the treatment been performed in South Africa (in rand terms). 29

31 Section 7 Severe Illness Benefit To select Option 2, the member must be a member of a recognised South African medical scheme. In addition: If the member is a member of Discovery Health, the deductible under Option 2 will be equal to the amount they will receive from their particular Discovery Health Plan had the treatment been performed in South Africa. If the member is not a member of Discovery Health, the deductible will be equivalent to the Discovery Health Rate for the treatment had it been done in South Africa, irrespective of whether or not they receive payment from the medical scheme they are a member of. Should the costs of treatment at the overseas facility exceed the amount payable under the Global Treatment Benefit, the excess will be for the member s account. The Global Treatment Benefit assists in funding the overseas treatment costs only. Discovery Life will not provide funding for any treatment performed in South Africa which precedes or is subsequent to the treatment at the overseas facility. The member must satisfy the criteria under Severity A, B, C or D of the Severe Illness Benefit to qualify for Option 2. Only treatment approved by the American Medical Association and drugs approved by the Food and Drug Administration in the USA are covered. Therapy, for example physiotherapy, occupational therapy or equivalent is excluded. The Global Treatment Benefit does not cover travel and accommodation costs relating to the overseas treatment. The member must notify Discovery Life of their choice between Option 1 and Option 2 at the time of claim notification under the Severe Illness Benefit. Apart from organ transplants, the overseas medical treatment must occur within three months of claim notification. In the case of organ transplants, the member must be placed on an organ transplant waiting list within six months of claim notification. Should their treatment not occur within these time periods, Discovery Life will pay the member the remaining 20% of their lump sum due under Option 1. The Global Treatment Benefit will not be available thereafter for the event that led to claim under the Severe Illness Benefit. Discovery Life does not accept any responsibility or liability for the quality of medical procedures, treatment or advice provided to the assured. Irrespective of the amount paid out to the member under the Global Treatment Benefit (Option 2), the amount deducted from their LIFE FUND will be the amount that would have been paid to them under Option 1. The Global Treatment Benefit allows the member to have multiple treatments overseas. Irrespective of the number of times they are treated overseas, the maximum payout for treatment of a particular or related illness is capped at the benefit amount under Option 1, less the deductible. The maximum payout for all life-changing events is capped at 2.5 times their initial Severe Illness Benefit sum assured and increased by the annual salary increase percentage of the member. The payout for treatment of a progressive illness will be based on the severity of the illness at the time of the treatment, less any payout for prior treatment at a lower severity. The Global Treatment Benefit is available on the Comprehensive PLUS and Comprehensive Severe Illness Benefit, including the automatic cover for children. The premium for the Global Treatment Benefit is included in the premium for the Severe Illness Benefit and this component is annually reviewable based on claims experience. The Global Treatment Benefit expires at the earlier of reaching age 65 and the benefit expiry age of the Severe Illness Benefit, as indicated in the Benefit Schedule. 30

32 Section 8 Funeral Cover Benefit 8. Funeral Cover Benefit The policyholder may select Funeral Cover Benefits, which are compulsory and applicable to all members. These benefits are funded by the policyholder. 8.1 How are benefits expressed? The benefit schedule indicates the benefits selected by the policyholder. The Funeral Cover Benefit is defined as a fixed rand amount, and is subject to maximums set by Discovery Life from time to time. 8.2 What is the Funeral Cover Benefit? A lump sum benefit is paid to cover the cost of a funeral for the member, spouse or child. Two benefit options are available: employee-only Funeral Cover Benefit employee and family Funeral Cover Benefit The Funeral Cover Benefit is provided to all members on a compulsory basis. An employer may access the family Funeral Cover Benefit, provided the family Funeral Cover Benefit is compulsory for all members who have a spouse. No medical evidence is required for the Funeral Cover Benefit. 8.3 How is a spouse defined? For all benefit types, a spouse is defined as the person that the member is legally married to and includes: a party to a customary union according to Black law, or a union recognised as a marriage under the tenets of any Asiatic religion, or a person living with the member in the manner of a spouse, living in a relationship of mutual dependence with the member, and running and sharing a common household with the member, or a person regarded by the member as a common law spouse and accepted as such by Discovery Life. Common law and same sex partners will only be covered if the relationship is disclosed to Discovery Life in writing. If a member has more than one spouse, the person to whom the member has been married for the longest as defined above will be deemed the spouse for all benefits excluding the Funeral Cover Benefit. A maximum of three spouses will be covered for the Funeral Cover Benefit. 8.4 How is a child defined? A child is defined as an unmarried person who is financially dependent on the member and is described as: a child under the age of 21 years, born of the member, or a dependent stepchild of the member, under the age of 21 years, or a foster child of the member, under the age of 21 years, or a child under the age of 21 years, legally adopted by the member, or a stillborn child (death of the foetus after the 26th week of pregnancy) born to the member, or a grandchild being a child of the member s children, where both the child s parents are deceased or the child is dependent on the member. Proof of dependency must be submitted to Discovery Life Group Risk. 31

33 Section 8 Funeral Cover Benefit A child of the member who studies full-time at a recognised educational institution and who has not reached the age of 24 years is considered a child. No age limit will apply to a child who is incapacitated by mental or physical infirmity and unable to maintain himself or herself, provided that such child is wholly dependent on the member for support and maintenance. Once a child has become independent of the member for support and maintenance, dependency cannot be revived at a later date and he or she will not be considered a child for the purposes of the Funeral Cover Benefit at any future date. A maximum of five children will be covered for the Funeral Cover Benefit. 8.5 What benefit payments are provided by the Funeral Cover Benefit? Employee-only funeral cover: upon the death of the member, a benefit payment equal to the amount of the Funeral Cover Benefit will be made. Employee and family funeral cover: upon the death of the member, spouse or child, a benefit payment equal to the amount of the Funeral Cover will be made. If all premium payments are up-to-date, Discovery Life will pay the Funeral Cover Benefit as set out in the benefit schedule in respect of a deceased life assured, to the policyholder (or another party if requested by the policyholder). In addition to the necessary forms and protocols required, the policyholder will be required to provide Discovery Life with the date and cause of death within three months of the date of death. 8.6 When does the Funeral Cover Benefit terminate? The Funeral Cover Benefit terminates at the selected benefit expiry age. The benefit expiry age is selected by the policyholder and is generally the age at which the member would reach normal retirement age. This means that if the member dies in service before the benefit expiry age, the claim will be assessed and paid, but claims after the benefit expiry age will not be accepted. Premiums will not be charged for the Funeral Cover Benefit after the member reaches the benefit expiry age. The family Funeral Cover Benefit will terminate: At the date the member reaches the benefit expiry age, age 65 or dies, whichever occurs first. Premiums will not be charged for the family Funeral Cover Benefit after the member reaches the benefit expiry age, age 65 or dies. At the date that the member leaves the service of the employer. For the spouse or child, if they no longer meet the definition of spouse or child as defined in this document. For the spouse at the date the spouse reaches the benefit expiry age, age 65 or dies, whichever occurs first. 32

34 Section 9 Spouse s Benefits 9.1 Spouse s Benefits The Group Risk LIFE PLAN offers the following valuable benefits to spouses: spouse s Life Cover Benefit spouse s Capital Disability Benefit spouse s Severe Illness Benefit The spouse s benefits are defined as a fixed rand amount or a multiple of the member s annual salary, and are subject to maximums set by Discovery Life from time to time. An employer may access the spouse s benefits, provided the spouse s benefits are compulsory for all members who have a spouse. A free cover limit will be provided for the spouse s benefits. Any spouse who has cover in excess of the free cover limit will need to provide Discovery Life with medical evidence. If a member has more than one spouse, the person to whom the member has been married for the longest as defined above will be deemed the spouse for all benefits excluding the Funeral Cover Benefit. 9.2 The payment of the spouse s benefits On the death of the spouse, a benefit payment equal to the amount of the spouse s LIFE FUND will be made to the policyholder. The following applies to the payment of spouse s benefits: The standard terms and conditions which apply to Discovery s member benefits will apply to the spouse s benefits. The spouse s Life Cover Benefit does not reduce the LIFE FUND of the member, unless specifically requested by the policyholder. Any benefit payment made in terms of the spouse s Capital Disability Benefit and spouse s Severe Illness Benefit will reduce the spouse s LIFE FUND. On the death of the spouse, a benefit payment equal to the amount of the spouse s Life Cover Benefit will be made to the policyholder. The amount of this benefit payment is calculated as follows: (i) initial LIFE FUND (CORE) plus (ii) any amount by which the LIFE FUND has grown, due to salary increases less (iii) any benefit payments previously deducted from the LIFE FUND 9.3 When does the spouse s benefit terminate? The spouse s benefit terminates in any of the following circumstances: At the date the member or the spouse reaches the benefit expiry age, age 65 or dies, whichever occurs first. Premiums will not be charged for the spouse s benefits after the member or spouse reaches the benefit expiry age, age 65 or dies. At the date that the member leaves the service of the employer. The spouse no longer meets the definition of spouse as defined in this document. 33

35 Section 10 Rewards for managing your health 10.1 Rewards for managing your health Discovery s Group Risk LIFE PLAN is a living policy, which while it compensates members and their families for events that influence their quality of life also rewards members for responsibly managing and improving their health while they are able-bodied. This is achieved through Vitality, which has been enhanced to form a valuable foundation to the Group Risk LIFE PLAN. Vitality Vitality is available to members on the Discovery Health Medical Scheme. Encouraging health and wellness is fundamental to the protection of members. If the policyholder has 50% or more of his or her members on the Discovery Health Medical Scheme, then the remaining members, although not on the Discovery Health Medical Scheme may also add the Vitality benefit through the Group Risk LIFE PLAN. Vitality membership can be obtained either through the Group Risk LIFE PLAN or through the Discovery Health Medical Scheme. The Vitality membership for the member and his or her dependants can only be activated through one of the two options and applies to the whole family. There is a monthly premium payable for this benefit. Vitality is designed to encourage members to look after their health and improve their lifestyle. By improving their health, they reduce their long-term healthcare costs. Please refer to the Vitality portfolio for complete details of the programme. Information is updated with the quarterly Vitality statement and Discovery magazine. Members and spouses can earn Vitality points for preventive measures Members and spouses who are not members of Discovery Health Medical Scheme can still receive Vitality points for preventive measures by posting a copy of their medical claim to: Discovery Vitality PO Box Sandton 2146 Members and spouses may also contact Vitality by calling the Vitality membership can expire Members Vitality membership will expire if their qualifying level for Vitality membership on the Group Risk LIFE PLAN falls below the qualifying level or if they are no longer members of a Discovery Life Group Risk LIFE PLAN Corporate Wellness The Discovery Health Medical Scheme pays for Wellness Days and Voluntary Counselling and Testing for employees that are on the Discovery Health Medical Scheme. Discovery Life Group Risk will pay for these Wellness Days and Voluntary Counselling and Testing for employees who are not on the Discovery Health Medical Scheme, but covered by a Discovery Life Group Risk policy, provided that 50% of members are covered by the Discovery Health Medical Scheme. The employer or attached retirement arrangement must have both the Life Cover Benefit and Income Continuation Benefit policy with Group Risk. Discovery Life Group Risk will pay for a maximum of 250 members. 34

36 Section 11 The Mortgage Protector 11.1 The Mortgage Protector If a member is disabled or dies and is: on the Group Risk LIFE PLAN that provides a Life Cover Benefit and the Income Continuation Benefit, and a member of Vitality and, has a registered bond or home loan with an outstanding balance, he or she will qualify for this benefit. The Mortgage Protector is separate from the Income Continuation Benefit payout. The Income Continuation Benefit is only used to create the event for the payment of the Mortgage Protector. The Mortgage Protector will pay a fixed number of monthly instalments into the member s bond account. The monthly Mortgage Protector instalment is calculated taking the following into account: the Vitality status of the member at the time of the claim as per the table below, and the average of the member s last 12 home loan instalments. Vitality status at date of claim event Blue Bronze Silver Gold Diamond 3 months 6 months 9 months 12 months 24 months Example Average monthly home loan instalment over the past 12 months was R10 000; Vitality status = Silver Benefit = R (9 x R10 000) paid on death or disability of member. Additional home loan repayments over and above the contractual monthly instalments are not included in the calculation of the average home loan instalment. The monthly installment is capped at 30% of the member s monthly salary. Properties held in companies, trusts and close corporations (CCs) are not eligible for this benefit. The benefit is only offered where the property and home loan are held in the member s name. However, co-ownerships are allowed. In the event of the member s death, the benefit will be paid as a lump sum. For disability, the benefit will be paid monthly Taxation Members may pay fringe benefit tax on the premium for the Mortgage Protector. The premiums for the Mortgage Protector are not guaranteed and will increase annually. Members must get appropriate guidance from a tax professional or from their authorised financial services provider for the correct treatment of the Mortgage Protector premium and benefits. 35

37 Section 12 Premium payments 12.1 Salary may be defined in various ways Although benefits are often defined as a multiple of salary, the definition of salary may differ for any particular scheme. The most common definitions of salary to be used for Group Risk schemes are: pensionable salary gross salary (this includes certain items of the employee s package that may not necessarily be pensionable) basic salary plus a certain portion of fluctuating emoluments running average salary. The salary for commission earners is calculated using a running average. The salary is calculated by totalling the salary for a period, starting with the current month and working backwards, and then dividing the total salary by the number of months in the period. The minimum period that may be selected for the calculation of the running average salary is six months. Example: let s assume a commission earner generated the following monthly income: January R February R March R April R May R June R July R In this example the period selected for the calculation of the running average salary is six months. The salary used for Group Risk benefits would be calculated as follows: June Group Risk salary= ( ) / 6 = July Group Risk salary= ( ) / 6 = Discovery Life will apply the salary definition as provided in the membership data Factors that affect the premium rating Discovery Life may use any of the following factors to determine the premiums charged for CORE, PLUS and FLEX Benefits to a particular scheme: Age of insured lives Gender of insured lives Occupation of insured lives Previous medical claims information of the insured lives, if they are Discovery Health members Nature of industry the scheme operates in Previous claims experience of scheme Region that scheme operates in How the Discovery Life premiums and benefits increase The initial LIFE FUND and other benefits are expressed as a multiple of the member s annual salary. The LIFE FUND increases as each member receives a salary increase. This typically occurs at the group scheme anniversary, although it may occur at any stage. Benefits increase as each member receives a salary increase, provided that Discovery Life is notified in writing. If the benefits are specified as a flat rand amount of cover rather than as a multiple of salary, the benefits will remain level, unless otherwise requested by the policyholder. The premiums will increase annually based on each member s salary and age next in that year, as well as the demographics of the group. Each year, on anniversary date, the premiums and benefits will be reviewed. The review will include a recalculation of members premiums based on the LIFE FUND, age at time of review, previous claims experience of the scheme and any other factor that has affected the risk of insuring the scheme. The LIFE FUND at the time of review is based on the member s salary at that time. 36

38 12.4 Premiums will increase when adding more benefits to the LIFE PLAN At the scheme review date the policyholder may select additional CORE, PLUS or FLEX Benefits. These changes will result in higher premiums and may be subject to medical underwriting Who is responsible for paying premiums? The policyholder is responsible for paying the premiums. Premiums may be paid monthly in advance or in arrears. The period of grace allowed for payment of premiums is two months, unless otherwise arranged with Discovery Life. Discovery Life will communicate the agreement on any extension of the grace period in writing. 1 January Advance premium due date 1 January 1 March Advance premium 2 months grace 1 March Advance premium payment date 1 January 31 January January premium 1 February 1 March 1 April 1 January 30 April 1 February Arrear premium due date 1 February 1 April Arrear premium 2 months grace If the full amount of premiums due is not received within the period of grace, no benefit will be payable and all cover will cease from the last date the full amount of premiums has been paid, unless otherwise agreed to in writing by Discovery Life. All premiums for CORE Benefits, PLUS Benefits, FLEX Benefits, and Vitality must be paid to Discovery Life by the policyholder according to the premium statement. The above premium payment terms and conditions apply. If Discovery Life allows an extension of the grace period for a particular scheme, a claim arising during the extended period of grace will not be paid until all outstanding premiums have been paid by the scheme When can Discovery Life alter the existing premium rates? The rates and calculation basis are effective from the commencement date until the scheme policy anniversary. A longer premium guarantee term may be granted in specific cases. This will be reflected in the benefit schedule. However, Discovery Life reserves the right to change the rate and calculation basis by giving one month s written notice if: there is a change in membership of more than 15% or a new associated company joins the policyholder or there is a change to the benefit under this policy the policyholder becomes involved in another business activity that substantially affects the risk under this policy. If the information required for processing the rate review is not submitted to Discovery Life within 30 days of the actual Group Risk LIFE PLAN anniversary date, Discovery Life will automatically re-rate the scheme on a no-change basis The benefit schedule will give you the details of the members cover 1 April Arrear premium payment date Please refer to the benefit schedule if you are unsure about which benefits your members are entitled to. The benefit schedule outlines all the policy details from address details to monthly premiums. The benefit schedule also contains precise details of which benefits are provided and any exclusions that may apply. The policyholder will receive a benefit schedule from Discovery Life at inception and the annual revision of the policy. If any of the policy details change, Discovery Life will send a new benefit schedule detailing the changes. 37

39 Section 13 Underwriting and the Free Cover Limit Multiplier 13.1 Medical information that is required All CORE and PLUS Benefits under this policy are limited to the free cover limit set out in the benefit schedule. No medical evidence is required for cover that is less than or equal to the free cover limit. Cover in excess of the free cover limit will only be granted once the required medical evidence has been submitted to the satisfaction of Discovery Life. On receipt of medical evidence, Discovery Life will give the member an underwriting decision in writing. Discovery Life will cover the costs of the medical underwriting required. Assuming Discovery Life is satisfied with the medical evidence provided, subsequent increases up to a maximum of 20% per year for a period of five years will not be subject to further underwriting. When a member selects new or additional benefits or increases the cover amount, the member will be required to comply with Discovery Life s medical underwriting policies applicable at the time. There is no free cover limit for FLEX Benefits and no cover is provided for FLEX Benefits during the medical evidence period Accident cover during the medical evidence period The medical evidence period is a 90-day period from the date the medical evidence was requested, during which time the medical evidence must be obtained, submitted and considered. Discovery Life will provide cover below the free cover limit for a member at the standard rates, terms and conditions of the Group Risk LIFE PLAN. During the medical evidence period, Discovery Life will provide Accident Cover (CORE and PLUS) in excess of the free cover limit, as follows: For Capital Disability and Severe Illness Benefits limited to claims arising due to an accident only. For Life Cover Benefits all claims, provided that the cause of death is not directly or indirectly attributable to any illness or injury which occurred within the six months before the beginning of the medical evidence period. Accident cover provided during the medical evidence period is provided at the standard rates, terms and conditions of the Group Risk LIFE PLAN. Accident cover in excess of the free cover limit will terminate on the earlier of the expiry of the medical evidence period and the policyholder being advised of Discovery Life s underwriting decision. The accident cover will exclude claims as a result of: attempted suicide or any self-inflicted injury or a member or his or her dependants being under the influence of alcohol, drugs or narcotics, unless a registered medical practitioner has prescribed the drugs or narcotics. The member and his or her dependants may not perform the role of registered medical practitioner or the claim being a result of wilfully and deliberately breaking any law, a wilful act of war, riot or acts of public hostility or participation in any type of aviation or airborne pursuit, except as a passenger travelling in a registered passenger aircraft that is owned and operated by a licensed airline or air-transport company or in a military passenger aircraft. The aircraft must be flown by a pilot holding a commercial pilot s licence, on a recognised route, between licensed airfields or participating in any type of aviation or airborne pursuit, except as a pilot piloting a registered passenger aircraft that is owned and operated by a licensed airline or air-transport company. The aircraft must be flown on a recognised route between licensed airfields, and the pilot must hold a current commercial pilot s license. 38

40 13.3 The Free Cover Limit Multiplier Members on Vitality qualify for an increased free cover limit depending on their Vitality status as per the following table: Vitality status Blue Bronze Silver Gold Diamond 100% 110% 120% 130% 140% The numbers in the above table are multiplicative adjustments applicable to Vitality members. Example If a scheme has a free cover limit of R , a Bronze Vitality member will qualify for a free cover limit of R x 110% = R Business rules and requirements The Free Cover Limit Multiplier is based on the member s Vitality status at the date that the medicals are requested. Member s that have had benefits declined or loaded above a certain free cover limit may not increase the Free Cover Limit Multiplier by improving Vitality status. The maximum free cover limit after allowing for the Free Cover Limit Multiplier is R on Group Life Assurance and R on the Income Continuation Benefit. 39

41 Section 14 How to claim and receive your benefits 14.1 How to receive a benefit payment If an insured life experiences a lifestyle-changing event for which he or she claims a benefit payment, please contact the financial adviser or Discovery Life s Group Risk contact centre on GROUP ( ). Discovery Life will then provide the necessary forms and protocols needed for the medical information Payment of benefits to the policyholder Payment by Discovery Life to the policyholder, or as requested by the policyholder, will be the final settlement of Discovery Life s obligations in terms of this policy. However, where Discovery Life believes that the policyholder could jeopardise the certainty of the member s benefit expectations or the benefit expectations of the member s beneficiaries, Discovery Life has the right to pay a benefit directly to the member or the member s beneficiaries Payment of the Life Cover Benefit Discovery Life will pay the death benefit as set out in the benefit schedule for a deceased life assured to the policyholder (or another party if so requested by the policyholder). In addition to the necessary forms and protocols required, the policyholder will be required to provide Discovery Life with the date and cause of death Payment of Capital Disability, Severe Illness and Income Continuation Benefits On the disability or severe illness of a life assured, Discovery Life will pay, after the waiting period (if applicable), the benefit set out in the benefit schedule for CORE, PLUS and FLEX Benefits, for the life assured, to the policyholder (or another party if requested by the policyholder). This benefit may be subject to benefit maximums as advised by Discovery Life from time to time. In addition to the necessary forms and protocols required, the member must submit the necessary medical evidence or any other information required by Discovery Life to establish whether the claim is valid in terms of the policy. The cost of obtaining medical information required by Discovery Life must be paid by the member. Any additional medical requirements will be paid by Discovery Life. Discovery Life may defer the assessment of the claim until all the medical evidence has been produced. The policyholder may appeal to Discovery Life to reconsider the claim if he or she is not satisfied with the claim assessment. If the policyholder wants the assessment reviewed, he or she must submit evidence in support of contention within eight weeks of Discovery Life s assessment, unless a longer period is agreed to in writing by Discovery Life. The costs of the review will be borne by the policyholder or the member. Discovery Life will have the final discretion in deciding whether a claim should be admitted and will communicate its final decision to the policyholder in writing When can a claim be refused? Discovery Life reserves the right to refuse claims when: The disability or severe illness for the member and any dependant was self-inflicted. Failure to disclose information about physical disabilities or medical conditions that affect the member or any dependants at the time that cover commences. The claim arose from participation in a hazardous occupation which was not disclosed to Discovery Life at any point in time and is not normally associated with the industry in which the member is employed. Discovery Life is unable to get sufficient medical evidence from the member or any dependant or treating medical practitioner to fulfil the criteria to make a benefit payment. 40

42 The disability or severe-illness claim was a result of: Wilful and deliberate breaking of any law or wilful involvement in any riot, insurrection, usurpation of power, martial law or war. Intentional and negligent consumption of poisons, alcohol, drugs and narcotics unless prescribed by a registered medical practitioner. (Neither the member nor his or her dependants may perform the role of a registered medical practitioner in these circumstances.) Excessive consumption of alcohol. Discovery Life shall not be liable for any claim under this policy if the policyholder or life assured or employer commits any act of dishonesty or fraud relating to any provisions contained in this policy. The claimant declines or neglects to undergo reasonable medical treatment when there is a reasonable likelihood that the medical treatment would improve the medical impairment. The benefits applied for under the Group Risk LIFE PLAN have been increased, or where the waiting period for the Income Continuation Benefit has been reduced, from those enjoyed under the previous scheme with another insurer where: The member is medically impaired during the twelve-month period immediately following the alteration. The member s medical impairment, in the opinion of Discovery Life s medical panel, is directly or indirectly attributable to an injury or illness for which he or she sought medical advice, or which he or she knew about or could reasonably be expected to have known about during the six-month period before the effective date of the alteration Pre-existing conditions may affect the claim In the case of Disability and Severe Illness Benefits, Discovery Life will not pay a claim during the first twelve months of the life assured becoming a member if, in the opinion of Discovery Life, the claim is directly or indirectly attributable to an injury or illness for which the member sought medical advice for or knew about (or could reasonably be expected to have known about) during the six months before joining the scheme When will the pre-existing conditions not be waived? The pre-existing conditions will not be waived for the following: a new group scheme where the provisions of this clause have not been fulfilled, the Global Education Protector, Contribution Protector and Mortgage Protector, on the commencement date of FLEX Benefits When may the pre-existing conditions be waived? The pre-existing conditions may be waived by Discovery Life in cases where a member is actively in the service of an employer and has previously satisfied these provisions under a policy issued by any insurer who was insuring the same benefits immediately before the commencement date. This is only allowed for conditions covered by the previous insurer and is a partial waiver. These pre-existing conditions may also be waived in other situations if agreed to by Discovery Life. If the clause is waived, an endorsement to the policy will be issued, showing the benefits for which the clause has been waived. 41

43 Section 14 How to claim and receive your benefits 14.9 War, riot and terrorism exclusion Discovery Life will not pay any Life Cover, Capital Disability, Severe Illness and Funeral Benefits in the event that the claim arises directly or indirectly as a consequence of: War and riot exclusion War or civil war, and which shall include but shall not be limited to active or passive participation therein; invasion which shall include but not be limited to invasion of the state by its enemies (foreign or otherwise); land and/or property invasions on state or private property, by anyone; acts by enemies of the state (foreign or otherwise); hostilities, warlike operations (whether war be declared or not), riots, strikes, labour disturbances, rebellion, revolution, insurrection, civil commotion, civil unrest or disturbance of the peace, which shall include but not be limited to active or passive participation therein or any activity associated with the investigation or containment of the foregoing by any security force. Furthermore, this exclusion includes any loss or damage, directly or indirectly occasioned by, happening through or in consequence of any act of any person or persons acting alone or on behalf of or in connection with any organisation the objects of which include the overthrowing or influencing of any de jure or de facto government by terrorism or any violent means or to create chaos, fear, alarm or dependency amongst the citizens of the state. Partial waiver of the war, riot and terrorism exclusion On request from the policyholder, Discovery Life will provide written confirmation if the passive war, riot, and terrorism clause has been partially waived. The inclusion of this waiver will be defined in the benefit schedule. This partial waiver will cover members for Death, Disability, Severe Illness, and Funeral Benefits where the cause can be directly or indirectly attributed to passive participation in an act of war, riot, or terrorism. This waiver will exclude a claim that is a consequence of direct or indirect active participation in war and riot, or terrorism. Discovery Life may cancel the waiver of the passive war, riot and terrorism exclusion, by giving the policyholder 24 hours notice if: Discovery Life is no longer able to reinsure this cover, or South Africa is involved in armed conflict with another country or is occupied by a foreign power. This waiver will at all times be subject to whether suitable reinsurance may be obtained. Should this not be available, the waiver will automatically be withdrawn. Discovery Life alleges that by reason of this exclusion, any loss, damage or expense whatsoever is not covered under this policy, the burden of proof to the contrary will lie with the policyholder. Atomic, biological and chemical war and terrorism Discovery Life will not pay any death, disability, severe illness or funeral benefits in the event that the claim arises directly or indirectly as a consequence of: use of nuclear, biological or chemical weapons, or any radioactive contamination, or attacks on or sabotage of facilities (including but not limited to nuclear power plants, reprocessing plants, final repository sites and research reactors) and storage depots, which lead to the release of radioactivity of nuclear, biological or chemical warfare agents, irrespective of whether any of the aforesaid has been performed with the specific use of information technology. In particular, cover will not exist when the attacks and sabotage have been performed with the specific use of information technology. 42

44 Section 15 Continuation option 15.1 What is a continuation option? A continuation option may be chosen by the policyholder to enable members to effect Individual LIFE PLANS with Discovery Life for the same benefits enjoyed under the Group Risk LIFE PLAN. A member may exercise the continuation option as detailed below. For Capital Disability and Severe Illness Benefits: as a result of the member leaving service other than for retirement provided that the member is 55 years old or younger. For Life Cover Benefits: as a result of the member leaving service on or before the earlier of normal retirement date or age 65. The member must have at least 12 consecutive months insured service with his employer. The member will not be allowed to exercise the continuation option if, at the date the member leaves service, a disability or severe illness claim in respect of the member has been lodged and the claim is still being considered. The continuation option may be exercised on the termination of the policyholder s participation in the assurance, provided that the policyholder ceases to operate as a going concern and/or the policyholder is not transferring to another fund which provides life and/ or disability assurance. The member will be required to complete an Individual LIFE PLAN application form. Under the member s Individual LIFE PLAN policy application, no medical underwriting will be required except for the requirements, conditions or exclusions in respect of the Acquired Immunodeficiency Syndrome (AIDS) or Human Immunodeficiency Virus (HIV), as Discovery Life may specify at the time of exercising the continuation option. Additional underwriting may be required if the member adds benefits that he or she did not have cover for as part of the Group Risk LIFE PLAN. The premium rate applicable at the time the continuation option is exercised and the risk class of the member will determine the premium payable on the Individual LIFE PLAN policy. The smoker status of the member will also be taken into account. Any pre-existing condition provisions continue to apply. Waiting periods, where applicable, will be not be shorter than those applicable to the Group Risk LIFE PLAN and maximum cover age will not be later than the benefit expiry age initially chosen according to the benefit schedule. The terms and conditions that are applied by Discovery Life to the issue of the Individual LIFE PLAN policies also apply to Individual LIFE PLAN policies effected using the continuation option. The member will have 60 days from the date of leaving his or her employer to request the continuation option in writing. If a member who has requested the continuation option dies or becomes medically impaired within 30 days of leaving his or her employer, then the maximum benefit that he or she would have obtained without proof of good health in terms of the continuation option will be paid to his or her dependants, nominees or estate, as decided by Discovery Life on his or her death, or it will be paid on medical impairment. The payment will be made as if an Individual LIFE PLAN policy had been effected at the date of leaving his or her employer. 43

45 Section 16 General legal provisions, definitives and rules 16.1 Documentation to be received This Group Risk LIFE PLAN Guide read in conjunction with the member schedule and benefit schedule constitutes the entire agreement between Discovery Life and the policyholder. Alterations to these documents will be treated as an endorsement signed by an authorised official of Discovery Life Currency and law Benefit payments and premiums are payable in the lawful currency of the Republic of South Africa. Any questions of law arising under this policy will be decided according to the laws of the Republic of South Africa Eligibility Eligible employee means a permanent, active, full-time employee who has not reached the benefit expiry age and who is employed for no less than 25 hours a week, and member means an eligible employee covered under this policy. A minimum of 75% of eligible employees must be insured as members under this policy at the commencement date of a new scheme. Where Discovery Life takes over cover for an existing scheme, 100% of eligible employees covered under the previous scheme must be insured as members under this policy. Membership is compulsory for every eligible employee who enters service on or after the commencement date. Any employee who becomes eligible for membership after the commencement date will become a member on the first day of the month coincident with or if not coincident with, then immediately following the day on which he or she first became eligible. No member may resign or cease membership as long as he or she remains in service of the employer and is under the benefit expiry age Maximum ages For CORE, PLUS and FLEX Benefits, members must be between the ages of 18 and 65. However, the maximum entry age for members who were not covered under another compulsory group scheme is 65 for Life Cover Benefits, and five years before the benefit expiry age for Capital Disability and Severe Illness Benefits. The maximum age at which a member may select FLEX Benefits is age 55 next Benefit expiry age The benefit expiry age for CORE, PLUS and FLEX Benefits will be selected by the policyholder and is generally the age at which the member would reach normal retirement age. The ages that may be selected are 60, 63 and 65. Discovery Life is able to provide life cover to a maximum benefit age of 70 years, if so requested by the policyholder and provided that the member is still an eligible employee. The benefit expiry age selected will be detailed per benefit on the benefit schedule Actively at work A member is to be actively at work, attending to and capable of fulfilling his or her normal daily duties on the first working day on which his or her cover commences. If not, the member s entry will be deferred until such time as eight consecutive weeks of uninterrupted service is completed. A member who is on annual or maternity leave at commencement will have this clause waived, provided that he or she did not receive medical treatment for a condition that lead to his or her disability or severe illness within eight weeks of his or her intended date of return to work. 44

46 When will the actively at work clause apply? On commencement of a group scheme with Discovery Life. For all group schemes that have not been previously insured. For an existing group scheme where the CORE and PLUS Benefit amounts have increased. Where there has been a change in the definition of a disability or to the various contingencies covered for a severe illness or family illness benefits. Always to the Global Education Protector, Contribution Protector, and Mortgage Protector. For new entrants into an existing group scheme. Where the member through his or her previous insurer has received an underwriting decision at special rates and/or exclusions, unless he or she would be prepared to provide Discovery Life with additional medical information. It will be effective from the commencement date of the FLEX Benefits. For any period outstanding in terms of a member complying with the conditions of this clause. When may the actively at work clause be waived? The actively at work clause may be waived for group schemes, at the discretion of Discovery Life, where the members have complied with the provisions of the clause under a group insurance policy, provided that there has been no break between the policies. Details of whether the clause has been waived are provided in the form of an endorsement to the policy Take-over of existing schemes The cover of members who are actively at work in the existing scheme will be taken over on the same terms and conditions as those that applied with the previous underwriter, subject to any maximum limits determined by Discovery Life and on receipt of written proof from the previous underwriter Particulars of the assured lives The policyholder will be required to provide Discovery Life with all documentation and proof of the particulars of the lives assured as required from time to time to determine the benefits and premiums. If it transpires that any of this information is incorrect, Discovery Life will be entitled to make appropriate benefit and premium adjustments Evidence of age Discovery Life will request evidence of the member s age before making a benefit payment. If the date of birth previously provided to Discovery Life by a member is incorrect, Discovery Life will determine the premiums which should have been paid and adjust the premiums retrospectively to the date on which the member became entitled to the assurance in terms of this policy. Any adjustment of premium will be reflected in the next premium statement to the policyholder Temporary absence If an employee is temporarily absent from the service of the employer other than by reason of disability, the following provisions shall apply: provided that payment of premiums continues, the benefits will be provided for a period of six months. The policyholder may apply for an extension in excess of six months, the maximum period of absence is 24 months, with benefits ceasing thereafter, if the member resumes active employment after benefits have terminated, he or she will be treated by Discovery Life as a new member. 45

47 Section 16 General legal provisions, definitives and rules Territorial limitations Members must be resident in the Republic of South Africa. If a member is temporarily absent from the Republic, the following provisions shall apply: the policyholder shall continue payment of premiums and the life assured shall continue to be covered for the assurance for a period of six months. If it is required that assurance must continue for absence in excess of six months, then Discovery Life must accept this in writing, after twenty-four consecutive months absence from the Republic, the assurance regarding the life assured will automatically terminate, upon return to the Republic by the life assured after the life assurance has ceased as described above, the assurance on the life assured shall recommence as if he or she were a new life assured Alterations to the policy Policy alterations are subject to three months written notice from either the policyholder or Discovery Life, unless a shorter period is agreed upon. If the amendment is the result of changes to legislation or regulations, Discovery Life may alter the policy from the effective date of the change without giving notice to the policyholder. Alterations by the policyholder will be binding for the CORE, PLUS and FLEX Benefits Notification of claims Claims must be submitted in writing to Discovery Life within three months of the date of the member s disability or severe illness and within six months of the member s death. Discovery Life may also request other documents to assess the claim Consent to disclosure policyholder The policyholder must consent to the exchange of information, including medical information, between Discovery Life, any medical practitioner consulted or any other life office, Discovery Health and Discovery Health Medical Scheme. The policyholder gives Discovery Life permission to access this information on the application form Consent to disclosure member The members must consent to the exchange of information, including medical information, between Discovery Life, any medical practitioner they have consulted or any other life office, Discovery Health and Discovery Health Medical Scheme. The policyholder gave Discovery Life permission to access this information on the application form Precedent No decision by Discovery Life in regard to any matter concerning the policy may be interpreted as a precedent. 46

48 16.17 Misrepresentation The information given to Discovery Life in the application form, or any other documents that were provided in support of the application, forms the basis upon which the policy is issued. If the member fails to disclose any information, or provide false information or distort information when applying for the policy, Discovery Life will be entitled to suspend their cover from the inception date of the policy. In addition to this, Discovery Life will also be entitled to: Refuse to pay out any current or future claims that are related to the misrepresentation or non-disclosure. Adjust the premium from the date of the misrepresentation or non-disclosure. Recover monies already paid to the member for claims that relate to the misrepresentation or non-disclosure. Cancel certain benefits or the entire policy with immediate effect, and keep any premiums paid to Discovery Life as penalty Fraud The policy and all its benefits may be cancelled if the policyholder or the member: submits a fraudulant claim uses any fraudulant means or devices to make claims provides false information in order to obtain a benefit knowingly allow anyone acting on their behalf to provide false information to obtain a benefit deliberately and willfully conspire to cause the illness or disability that gives rise to a claim. 47

49 Section 17 Cession and beneficiaries 17.1 Cession and beneficiaries The unapproved Life Cover Benefits provided through a Discovery Group Risk LIFE PLAN may be ceded to a third party. Discovery Life will pay the Life Cover Benefit as set out in the benefit schedule for a deceased life assured to the policyholder or another party if requested by the policyholder Approved policies In the case of approved policies, the policyholder is the Retirement Fund. The payment of the death benefit is regulated in terms of Section 37C of the Pension Funds Act No 24 of The trustees of the fund will therefore formulate a trustee resolution of the distribution of the death benefit, taking into account any dependants, beneficiaries and nominees, in this order. The life cover provided by a Retirement Fund is designed to provide for dependants and beneficiaries and lastly for nominees. A nominee could be an institution (such as a bank). Because of the regulation of approved life cover through the Pension Funds Act, it is not suited to be ceded to a bank, as this does not guarantee payment to the nominee Unapproved policies In the case of unapproved policies, the policyholder is the employer. The employer takes out a policy with an insurer to provide cover for its employees. The death benefit is distributed in accordance with a beneficiary nomination form. The employee may nominate any party (person or institution) as a beneficiary. The employer, employee and institution (bank) need to agree that the life cover may be used for the payment of an outstanding loan amount in the event of the death of the employee What is required to enable members to cede their Life Cover Benefits? The employer needs to take out an unapproved policy and agree that the life cover may be ceded to a bank. The employee needs to complete a beneficiary nomination form ceding the life cover to the institution (bank). The institution (bank) needs to accept the cession What are the responsibilities of the parties involved? The employer is responsible for keeping the beneficiary nomination form in safe custody and in the event of the death of the employee instructing the insurer on the payment of the death benefit. The employee is responsible for completing the beneficiary nomination form and keeping it up to date. Discovery Life is responsible for paying the death benefit as instructed (by the employer) on the death of the employee which in this case will include a payment to the institution (bank). The remainder of the death benefit (if any) will be paid to the employees beneficiaries. 48

50 Section 18 Discontinuance 18.1 Discontinuance by the policyholder or employer The policyholder must give Discovery Life one calendar month s written notice should he or she wish to discontinue the scheme. If this occurs, the policyholder will not be entitled to resume premium and all benefits will end at the expiry of the notice period unless otherwise agreed by Discovery Life in writing Discontinuance of benefits for a member The benefits in respect of a particular member and his or her family may fully or partially terminate as soon as any of the following events occur: full or partial discontinuance of premium payments in respect of a particular member the member reaching any benefit expiry age the member ceasing to be an eligible employee or member the admission by Discovery Life of a claim for a death benefit Discontinuance by Discovery Life Discovery Life has the right to discontinue the benefits provided to members and dependants in terms of this policy if: the policyholder is placed under judicial management or liquidation, or has been liquidated, or effects a compromise with its creditors, or there is any material non-compliance by the policyholder regarding any of the provisions of this policy. This policy will be discontinued on the date of termination of the last remaining member s participation in this policy. On discontinuance of CORE Benefits, the PLUS, FLEX and Home Loan Benefits will automatically cease. 49

51 Appendix 1 Disability Benefits General provisions All changes reflected in Appendix 1 must be permanent despite treatment according to recognised medical protocols. These new life-changing events must have occurred since the date of commencement of the policy. 1. Cardiovascular system Disease Category A Category B Myocardial infarction or Valvular heart disease or Cardiomyopathy or Cardiac arrhythmias or Congenital heart disease Hypertension Pericardial heart disease Peripheral arterial disease Congestive heart failure with at least two signs or symptoms persisting for six months on optimal treatment or METS less than 1.7 or Ejection fraction less than 30% or NYHA classification IV or Awaiting cardiac transplantation Diastolic pressure > 105mmHg on optimal treatment and complicated by at least two of: Kidney dysfunction with a GFR of less than 15ml/min/1.73m² according to the MDRD study equation Cerebrovascular incident LVH (septal wall thickness to posterior LV wall thickness 1:1.3) on echocardiogram Grade IV retinopathy Congestive heart failure (CHF)* CHF* with at least two signs or symptoms persisting for six months on optimal treatment (including surgery) Severe vascular ulceration or Gangrene or Amputation or Failed vascular surgery with persistent ischaemia and no palpable pulses confirmed by permanently absent Doppler readings Congestive heart failure with at least one sign or symptom persisting for six months on optimal treatment or METS less than 3 or Ejection fraction less than 40% or NYHA classification III Diastolic pressure more than 100mmHg on optimal treatment and complicated by at least one of: Kidney dysfunction with a GFR of less than 30ml/min/1.73m² according to the MDRD study equation CVA Grade III retinopathy CHF* CHF* with at least one sign or symptom persisting for six months on optimal treatment (including surgery) and significant pericardial thickening/calcification Permanently absent Doppler readings, cold leg, dependent rubor and pain on exercise Peripheral venous disease No benefit Severe deep and widespread vascular ulceration * Signs and symptoms of congestive heart failure (CHF): Shortness of breath at rest 3+ pedal oedema Orthopnoea Paroxysmal nocturnal dyspnoea Jugular venous distension Rales in lung Presence of S3. 50

52 2. Respiratory system Disease Category A Category B Chronic obstructive airways disease (chronic bronchitis emphysema) or Asthma or Restrictive or Mixed lung diseases FVC less than 40% of predicted* or FEV1 less than 40% of predicted* or Dco less than 40% predicted* or Requiring the constant use of oxygen These changes must be permanent, despite treatment according to recognised medical protocols FVC 40% 49% of predicted* or FEV1 40% 49% of predicted* or Dco 40% 49% predicted* These changes must be permanent, despite treatment according to recognised medical protocols Lung cancer See cancer table See cancer table * Pulmonary function tests should be performed by a pulmonologist, including post-bronchodilatation testing, and show less than 5% variation between three successful readings these tests must be technically acceptable to the treating specialist as well as Discovery Life s medical panel. 3. Mental and behavioural disorders Disease Category A Category B Depression Schizophrenia and other psychotic disorders Ongoing medical treatment from a psychiatrist for more than two years and a course of ECT therapy and more than two in-patient admissions of longer than two weeks or Permanent inability to perform 4 out of 6 Activities of Daily Living Permanent inability to perform 4 out of 6 Activities of Daily Living despite treatment according to recognised medical protocols or Persistent confusional state** or Permanently legally institutionalised*** Ongoing medical treatment from a psychiatrist for more than two years and more than two in-patient admissions of more than two weeks or Permanent inability to perform 2 out of 6 Activities of Daily Living) or Total lack of social interaction* after ongoing treatment from a psychiatrist for two years Permanent inablility to perform 2 out of 6 Activities of Daily Living despite treatment according to recognised medical protocols or Temporarily legally institutionalised for a period longer than six months*** * Unable to answer the telephone and hold a face to face conversation for at least five minutes and be unable to travel 50 metres outside using all available aids. ** Permanent inability to follow simple instructions and unable to perform simple daily tasks including eating, drinking and washing and unable to have insight into his or her disability. *** Excluding institutionalisation for drug or alcohol abuse or a violation of South African criminal law. 51

53 Appendix 1 Disability Benefits 4. Nervous system Category A Category B Total aphasia or total and permanent loss of speech or 60% speech impairment* or Inability to comprehend and communicate language symbols or Permanent inability to perform 4 or more out of 6 Activities of Daily Living or Permanent inability to perform 3 or more Self-care Activities of Daily Living or Persistent vegetative state or Complete destruction of both optic nerves or Profound short-term memory loss or Persistent disabling hemiplegia or Moderate to severe cognitive impairment or Persistent confusional state or Paralysis of two limbs with loss of bowel or bladder function or Less than 20/200 Snellen rating bilaterally** or 70% visual acuity impairment *** or Total loss of hearing bilaterally** All changes must be permanent Permanent inability to perform 2 or 3 out of 6 Activities of Daily Living or Permanent inability to perform 2 Self-Care Activities of Daily Living or Complete destruction of one optic nerve or Permanent hemianopia or Complete loss of sight in one eye or Persistent disabling monoplegia or Less than 20/125 Snellen rating bilaterally** or 50% visual acuity impairment *** or Greater than 75% binaural hearing impairment or Complete deafness in one ear** * Includes aphasia and dysarthria ** Hearing, speech and sight measurements are not limited to causes within the nervous system, but to any anatomical or functional impairment causing these outcomes. All measurements are with appropriate aids. *** AMA Guides to the Evaluation of Permanent Impairment: Latest edition. Neuropsychometric and any other appropriate testing must be done to demonstrate permanency and pathology with regard to soft neurological signs. 52

54 5. Digestive system Disease Category A Category B Upper and lower digestive tract disease Liver and biliary disease Anatomic loss and alteration in gastrointestinal tract with medical evidence of organic disease and greater than 25% weight loss below accepted desirable weight or BMI of less than 14* and evidence of ongoing nutritional deficiency and no response to medical therapy or Complete faecal incontinence or Persistent, continuous disturbance of bowel function with evidence of organic disease or Irreparable hernia with ongoing bowel dysfunction or Inability to swallow due to organic disease These changes must be permanent Progressive chronic liver disease with persistent jaundice, bleeding oesophageal or gastric varices or Central nervous system manifestations of hepatic insufficiency or Significant ongoing ascites which is refractory to treatment or Permanent primary sclerosing cholangitis or Awaiting liver transplantation on a recognised SA or international transplant list Anatomic loss or alteration in gastrointestinal tract with medical evidence of organic disease and greater than 15% weight loss below accepted desirable weight or BMI less than 16* and evidence of ongoing nutritional deficiency and minimal response to medical therapy or Partial faecal incontinence or Persistent disturbance of bowel function with evidence of organic disease These changes must be permanent Progressive chronic liver disease with history of significant ongoing ascites, bleeding oesophageal or gastric varices within the past year or Intermittent hepatic encephalopathy * BMI needs to have dropped by at least 4kg/m 2 since onset of disease/disorder. 53

55 Appendix 1 Disability Benefits 6. Renal disease Category A Permanent kidney dysfunction with a GFR of less than 15ml/min/1.73m² according to the MDRD study equation or Ongoing haemodialysis or Ongoing peritoneal dialysis or End-stage renal disease or Complete permanent urinary incontinence Category B Permanent kidney dysfunction with a GFR of less than 30ml/min/1.73m² according to the MDRD study equation 7. Endocrine system Disease Category A Category B Diabetes mellitus Type I and Type II diabetes mellitus with permanent kidney dysfunction with a GFR of less than 15ml/min/1.73m² according to the MDRD study equation or Grade IV retinopathy or Any other complications refer system involved Type I and Type II diabetes mellitus with permanent kidney dysfunction with a GFR of less than 30ml/min/1.73m² according to the MDRD study equation or Grade III retinopathy or Any other complications refer system involved Other Refer system involved Refer system involved 54

56 8. Other* Category A Permanent inablility to perform 4 out of 6 Activities of Daily Living or Permanent inability to perform 3 Self-care Activities of Daily Living or Any permanent blood disorder resulting in ongoing transfusion of four units of blood or blood products per month All changes must be permanent Category B Permanent inability to perform 2 or more Activities of Daily Living or Permanent inability to perform 2 Self-care Activities of Daily Living or Three epileptic attacks (generalised seizures) per week despite optimal therapy All changes must be permanent 9. Advanced AIDS Category A Despite optimal treatment, a permanent CD4 cell count less than 200 and positive PCR and: Kaposi s sarcoma or Pneumocystis carinii pneumonia or Progressive multifocal leukoencephalopathy or Pulmonary cryptococcus 10. Cancer Category A Stage IV (metastatic) cancer or Leukemia or lymphoma with the following staging: Ann Arbor stage 3 or 4, RAI stage 3 or 4, Binet C or falling into the high risk on the international Prognostic index or scoring 4 on the Eastern Cooperatice Oncology Group performance scale or Stage III cancer requiring ongoing medical care, scoring 4 on the Eastern Cooperative Oncology Group (ECOG) performance status scale continuously for a period of over six months 55

57 Appendix 1 Disability Benefits 11. Musculoskeletal system* Disease Category A Category B Hand Upper limb Lower limb disease Spine Loss of use of hand Manual occupation: Loss of eye-hand coordination or Loss of manual dexterity 80% impairment of dominant upper limb** or 100% impairment of non-dominant upper limb** Manual occupation: Loss of muscle power resulting in inability to grip or Loss of sensory discrimination or 50% impairment of either upper limb** Loss of use of leg Manual occupation: 50% impairment of leg** Cauda equina or Loss of bowel or bladder integrity or Paraplegia or Quadriplegia or Cervical spine impairment resulting in 30% WPI after surgery unless surgery is medically contra-indicated or Thoracic spine impairment resulting in 22% WPI after surgery unless surgery is medically contra-indicated or lumbar spine impairment resulting in 33% WPI after surgery unless surgery is medically contra-indicated or Permanent inability to perform 3 Self-care Activities of Daily Living Loss of use of more than three fingers, one of which includes either thumb or index finger 60% impairment of dominant upper limb** or 90% impairment of nondominant upper limb** Manual occupation: 30% impairment of either upper limb 90% impairment of leg** Manual occupation: 30% impairment of leg** Radiculopathy and significant extremity impairment as indicated by atrophy, loss of reflexes, dermatomal sensory loss, loss of spine motion integrity as documented by neurological or motor compromise** or Cervical spine impairment resulting in 24% WPI after surgery unless surgery is medically contra-indicated or Thoracic spine impairment resulting in 16% WPI after surgery unless surgery is medically contra-indicated or lumbar spine impairment resulting in 24% WPI after surgery unless surgery is medically contra-indicated or Permanent inability to perform 2 Self-care Activities of Daily Living Soft tissue Severe facial disfigurement or 25% body surface area full thickness burns resulting in contractures with 50% WPI** 15% body surface area full thickness burns resulting in contractures with 30% WPI or Ongoing skin disorder affecting more than 50% body surface area including hands Manual occupation greater than 30% job description manual labour or profession requiring manual dexterity. * Disorders include muscle, bone, nerve or joint impairments. ** Based on AMA guides to the Evaluation of Permanent Impairment; 6th Edition examining doctor will be provided with specific valuating protocols. WPI Whole person impairment 56

58 12. Basic Activities of Daily Living The Activities of Daily Living (ADLs) is an internationally used scoring system that assesses the functional ability of a person in total, that is it takes into account the physical, social and interactive abilities of a person. Discovery Life uses the Activities of Daily Living to assess functioning in both the Severe Illness and Capital Disability Benefits when objective criteria of impairment are needed, for example, in the assessment of strokes, neurological diseases and psychiatric diseases. Changes to Activities of Daily Living must be permanent and must have occurred since the date of commencement of the policy. Discovery Life reserves the right to request an Occupational Therapist s assessment of Activities of Daily Living functioning, using standardised assessment methods. There are six main categories of Activities of Daily Living: Self-care examples are bathing, transferring, dressing, eating, eliminating and mobility Communication examples are hearing, speaking, reading, writing, using a keyboard Physical activity examples are standing, walking, stooping Sensory function examples are hearing, seeing, tactile feeling, tasting, smelling Hand functions examples are grasping, holding, pinching, percussive movements, and sensory discrimination Advanced functions examples are travel, sexual function, memory, sleep pattern and stress adaptation. Each category has a number of activities associated with it, for example communication hearing, speaking, reading, writing and keyboard use. If the specified number of the activities within each category cannot be done, the whole category is scored as an inability to perform that Activities of Daily Living category. All Activities of Daily Living should be measured with assistive devices where applicable. Please refer to the Appendix 2 score sheet used to assess the Activities of Daily Living. Activities of Daily Living scoring The following scoring method is used to score the Activities of Daily Living score sheet. If a person is independent in performing that activity, he is regarded as able to do that activity (can). If a person makes use of assistive devices, or requires the supervision of another person in performing that activity, he is regarded as being able to do the activity with help. Examples of assistive devices are walking frames, raised toilet seats, shower or bath benches, hearing aids. Please note that glasses are not classified as an assistive device. If a person is completely dependent on another person(s) to perform an activity, he is regarded as unable to do that activity (cannot). Self-care category If a person cannot do one activity, it is scored as the inability to perform the Self-care Category of the Activities of Daily Living score sheet. If a person needs help with two activities, it is scored as the inability to perform one Self-care activity or as the inability to perform the whole Self-care Category of the Activities of Daily Living score sheet. Communication If a person cannot do one activity, it is scored as the inability to perform the Communication Category of the Activities of Daily Living Score Sheet. If a person has minimal ability to do two activities, it is scored as the inability to perform the Communication Category of the Activities of Daily Living score sheet. 57

59 Appendix 1 Disability Benefits Physical activity If a person cannot do three activities, it is scored as the inability to perform the Physical Activity Category of the Activities of Daily Living score sheet. If a person needs help with six activities, it is scored as the inability to perform the Physical Activity Category of the Activities of Daily Living score sheet. Sensory function If a person cannot do one activity, it is scored as the inability to perform the Sensory Function Category of the Activities of Daily Living score sheet. If a person has minimal ability to do two activities, it is scored as the inability to perform the Sensory Function Category of the Activities of Daily Living score sheet. Hand function If a person cannot do one activity, it is scored as the inability to perform the Hand Function Category of the Activities of Daily Living score sheet. If a person has minimal ability to do two activities, it is scored as the inability to perform the Hand Function Category of the Activities of Daily Living score sheet Advance activities If a person cannot do one activity, it is scored as the inability to perform the Advance Activities Category of the Activities of Daily Living score sheet. If a person has minimal/average ability to do four activities, it is scored as the inability to perform the Advance Activities Category of the Activities of Daily Living score sheet. (see table on next page) 58

60 Appendix 2 Activities of Daily Living score sheet Activities of Daily Living score sheet Self-care Bathing Can With help Cannot Grooming Can With help Cannot Dressing Can With help Cannot Eating and feeding Can With help Cannot Bladder and bowel function Can With help Cannot Mobility Can With help Cannot Communication Hearing Normal Minimal Cannot Speaking Normal Minimal Cannot Reading Normal Minimal Cannot Writing Normal Minimal Cannot Keyboard use Normal Minimal Cannot Physical activity Standing Can With help Cannot Sitting Can With help Cannot Reclining Can With help Cannot Walking Can With help Cannot Stooping Can With help Cannot Squatting Can With help Cannot Kneeling Can With help Cannot Reaching Can With help Cannot Bending Can With help Cannot Twisting Can With help Cannot Carrying Can With help Cannot Lifting Can With help Cannot Pushing Can With help Cannot Pulling Can With help Cannot Climbing Can With help Cannot Exercising Can With help Cannot Sensory function Hearing Normal Minimal Cannot Seeing Normal Minimal Cannot Tactile sensation Normal Minimal Cannot Tasting Normal Minimal Cannot Smelling Normal Minimal Cannot continued on the next page 59

61 Appendix 2 Activities of Daily Living score sheet Activities of Daily Living score sheet Hand functions Grasping Normal Minimal Cannot Holding Normal Minimal Cannot Pinching Normal Minimal Cannot Percussive movements Normal Minimal Cannot Sensory discrimination Normal Minimal Cannot Advanced activities Travel (riding, driving) Can With help Cannot Sexual function Can Cannot Social interaction Good Average Poor Understand concepts Good Average Poor Memory Good Average Poor Problem solving Good Average Poor Stress adaptation Good Average Poor Sleep pattern Good Average Poor Recreational/social activities Good Average Poor 60

62 Appendix 3 Severe Illness Benefits General provisions Any diseases or disorders must be shown to be new life changing events since the date of commencement of the policy with evidence of acute signs or symptoms compatible with the event Any change in Activities of Daily Living must be shown to be a new change since diagnosis of the disease or disorder Any definition pertaining to a transplant will include being on the official South African or official international waiting list for the relevant transplant. 1. Cancer Benefit Definition: Abnormal growth of cells, which results in the invasion of normal tissue or the spread to distant organs (metastasis).degree of malignancy is based upon the propensity of cells to invade and spread. Carcinoma-in-situ (except for carcinoma-in-situ of the breast) would be specifically excluded. Pre-malignancy is also excluded. A current internationally recognised staging system will be used to evaluate a claim. Brain tumours are covered under the Nervous System Benefit. Diagnosis: Histology confirming the diagnosis Staging of the cancer Relevant CT/MRI scans and work-up Specialist s report. 61

63 Appendix 3 Severe Illness Benefits Severity A Stage IV cancer or Stage III cancer or AML or CLL (Stage III or IV on the Rai classification system) or CML or ALL (adults) or Bone marrow transplant or Severe Aplastic Anaemia as defined by the International Aplastic Anaemia Study Group or Stage III multiple myeloma on the Durie-Salmon scale or Hodgkin s or Non-Hodgkin s lymphoma Ann-Arbor Stage III or above (or equivalent) or Prostate cancer T4N0M0 or with affected lymph nodes or distant metastases or Malignant Melanoma Stage III and IV Severity C Stage II cancer or CLL (Stage II on the Rai classification system) or Stage I or II multiple myeloma on the Durie-Salmon scale or Hodgkin s or Non-Hodgkin s lymphoma Ann-Arbor Stage II or above (or equivalent) or Prostate cancer T3N0M0 or Malignant Melanoma stage II Severity D Stage 1 cancer Treated with surgery only or Stage 1 cancer Treated with surgery, chemotherapy and/or radiotherapy or CLL (Stage 0-I on the Rai classification system) or Moderate Chronic Aplastic Anaemia as defined by the International Aplastic Anaemia Study Group or Hodgkin s or Non-Hodgkin s lymphoma Ann-Arbor Stage I or above (or equivalent) or Prostate cancer T2N0M0 or Malignant Melanoma T1bN0M0, T2N0M0 Severity E Carcinoid syndrome or Myelodysplastic syndrome or Myelofibrosis Severity F Mastectomy for carcinoma-in-situ Severity G Basal cell carcinoma greater than 2cm or Squamous cell carcinoma greater than 2cm or Prostate cancer T1N0M0 or Lentigo Maligna or Melanoma T1aN0M0 or Myeloproliferative disorder: Polycythemia Vera, Essential thrombocytosis 62

64 2. Heart and Artery Benefit This benefit covers: Heart: heart attack, cardiac surgery and diseases of the heart Arteries: abnormalities in vessels that take blood from the heart, from any cause. Definition: Any thoracotomy, open heart operation or keyhole surgery involving the repair of an atrial or ventricular septal defect, coronary artery bypass, heart valve replacement, pericardiectomy, removal of a cardiac tumour, arrhythmia surgery, acute myocardial infarction or acute medical intervention for cardiac pathology. The severity status with this benefit is based on the severity of the complications either as a result of the surgery or as a result of the disease process necessitating the surgery. Only one payment will be made per coronary event. A single coronary event is defined as incorporating all cardiac pathologies or procedures that occur within 30 days of each other. Diagnosis: Full cardiologist, cardiothoracic surgeon, neurosurgeon or vascular surgeon assessment. Sight of all ECGs, echocardiograms and blood tests will be required for assessment. Mild myocardial infarction as evidenced by all three of the the following criteria: compatible clinical symptoms, characteristic ECG changes, for example ST segment and T wave changes indicative of myocardial ischaemia, or myocardial infarction and Troponin T of 0.5ng/ml or a Troponin I of 0.25ng/ml or raised CK-MB mass up to 2x normal values in acute presentation phase, up to 4x normal values post intervention. Myocardial infarction of specified severity as evidenced by compatible clinical symptoms, new pathological Q waves or ST segment and T wave changes with increase in Troponin T more than 1.0 ng/ml or Troponin I more than 0.5ng/ml or CK-MB mass more than 2x normal values in the acute presentation phase or more than 4x normal values post-intervention or a total CK elevation of more than 2x normal values with at least 6% being CK-MB. Chronic diastolic heart failure: NYHA class 4 and irreversible restriction demonstrated on Doppler echocardiography. Permanency of the impairment of the ejection fraction will be established in two measurements taken three months apart unless otherwise proven to the satisfaction of Discovery Life. 63

65 Appendix 3 Severe Illness Benefits Severity A 4 vessel CABG or Permanent ejection fraction of less than 40% or Severe myocardial infarction with ejection fraction of less than 40% at least 14 days post-acute infarction or Heart or heart and lung transplant or Chronic diastolic heart failure NYHA class 4 or Heart Valve replacement Severity B 3 vessel CABG or Permanent ejection fraction between 40 and 50% or Myocardial infarction with ejection fraction of less than 50% at least 14 days post-acute infarction or Thoracic or abdominal aneurysm requiring repair (traumatic or medical cause) or Valvuloplasty Severity C 1 or 2 vessel CABG or Aorto-iliac aneurysm requiring repair (traumatic or medical cause) or Myocardial infarction of specified severity or Open Heart surgery to correct a structural abnormality in the heart eg ventricular aneurysm, HCM or atrial myxoma Severity D Pericardectomy or IIeofemoral aneurysm requiring repair (traumatic or medical cause) or Symptomatic internal carotid artery stenosis in one or both carotid arteries requiring intervention or Valvotomy or Mild myocardial infarction as specified above Severity E Acute rheumatic fever with cardiac involvement or Endocarditis/pericarditis with more than 5 days ICU stay or Acute heart failure with more than 5 days ICU stay Severity F Percutaneuos coronary intervention (Angioplasty with or without stent) or Keyhole cardiac surgery or Arrhythmia requiring permanent pacemaker or Permanent defibrillator insertion or Pathway ablation or Arteritis or endarteritis requiring more than 7 days hospital stay or Symptomatic atrial/ventricular septal defect requiring closure Severity G Cardioversion or Atrial fibrillation despite therapy or Occlusion of major artery or Anti-arrhythmic therapy administered as medical emergency or Inotropic support for more than 2 days or Malignant hypertension (diastolic greater than 120mmHg and papilloedema) on optimal treatment 64

66 3. Nervous System Benefit This benefit covers: Brain stroke, brain tumours and chronic diseases Nerves chronic diseases Spinal cord chronic diseases Arteries that supply the brain. Definition: Death of brain tissue due to inadequate blood supply or haemorrhage resulting in neurological deficit lasting longer than 24 hours. An alteration in nerve cell bodies, nerve fibres or receptor sites of a chronic nature producing ongoing irreversible deterioration in neurological functioning and all tumours of the brain including meningiomas and gliomas. Coma resulting from either a structural, traumatic or metabolic cause. Quadriplegia and paraplegia due to disease or trauma. Alzheimer s disease and senile dementia are covered once Severity A criteria are reached. Pituitary microadenomas and transient ischaemic attacks are specifically excluded from this benefit. ADL measurements would not be applicable for the Child Severe Illness Benefit. Diagnosis: The relevant investigations must be done and results must confirm the diagnosis, including CT scan or MRI imaging Treatment by either neurologist or neurosurgeon Appropriate signs and symptoms must be present Loss of neurological function compatible with the pathology involved Stroke: either infarction or haemorrhage into the brain, spinal cord or meninges with evidence of a new incident on either MRI or CT scan and signs and symptoms compatible with the area of infarction or haemorrhage Permanency will be established after 90 days unless otherwise proven to the satisfaction of Discovery Life. 65

67 Appendix 3 Severe Illness Benefits Severity A Stroke with permanent motor, speech or visual deficit or Permanent inability to perform 4 out of 6 Activities of Daily Living or Permanent inability to perform 3 Self-Care Activities of Daily Living or Total permanent aphasia or Quadriplegia or Paraplegia or Glasgow Coma Scale of less than 8/15 lasting longer than 96 hours or Definite diagnosis of motor neuron disease or WHO Grade III and IV brain tumours Severity B Stroke with permanent cognitive, sensory or other stroke syndrome resulting in neurological deficit or The permanent inability to perform 3 out of 6 Activities of Daily Living or The permanent inability to perform 2 Self-Care Activities of Daily Living Severity C Stroke with minor permanent neurological deficit or The permanent inability to perform 1 or 2 out of 6 Activities of Daily Living or Surgery involving brain tissue or cerebral vasculature that requires craniotomy (excluding brain abscesses) or WHO Grade II brain tumours Severity D Stroke with full recovery or Depressed skull fracture with brain laceration or WHO Grade I brain tumours or Subarachnoid haemorrhage not requiring surgery or Definite diagnosis of multiple sclerosis Severity E Depressed skull fracture or Brain abscess or Glasgow Coma scale less than 8/15 for longer than 72 hours but less than 96 hours or Pituitary macroadenomas Severity F Stereotactic brain surgery or Bacterial meningitis or Endovascular procedures involving brain tissue or cerebral vasculature Severity G Cerebral oedema or Status epilepticus requiring ventilation or Hydrocephalus 66

68 4. Gastrointestinal Benefit Definition: Diseases or disorders that cause the liver, pancreas, biliary system, upper gastrointestinal tract or bowel to be physiologically or anatomically compromised or to cease function. This benefit specifically excludes any disease or disorder that is related to alcohol or drug abuse in any way. Diagnosis: Appropriate signs and symptoms must be present Ongoing treatment by a specialist Relevant investigations and histology reports must confirm the diagnosis. Severity A Cirrhosis of the liver or Sclerosing cholangitis or Fulminant hepatic necrosis or Liver transplant or Pancreas transplant Severity C Chronic pancreatitis with secondary complications or Portal hypertension evidenced by more than 15mmHg pressure in the portal vein and either oesophageal varices, ascites or splenomegaly or Permanent colostomy/ileostomy (due to ulcerative colitis, Crohn s disease or any other cause) or Chronic persistent hepatitis (Knodell score of at least 13 out of 22) or Primary billiary cirrhosis Severity D Any disease or disorder requiring partial hepatectomy or pancreatectomy Severity E Loss of use of more than 1/3 of the tongue or Total colectomy Severity F Tracheal-oesophageal fistula or Chronic rectal fistula Severity G Diverticulitis with perforation or Pancreatic cyst requiring drainage 67

69 Appendix 3 Severe Illness Benefits 5. Connective Tissue Diseases Benefit Definition: Circulating immune-complex diseases, which can involve many organs. Diseases covered by this benefit are progressive systemic sclerosis, rheumatoid arthritis, systemic lupus erythematosis (SLE), sarcoidosis, polyarteritis nodosa, giant cell arteritis, Wegener s granulomatosis and polymyositis. Diagnosis: Definite diagnosis according to internationally recognised criteria and treatment of the condition by a specialist in connective tissue diseases. Severity A Renal impairment resultant from immune-complex deposition in the kidneys or Severe SLE involving at least 3 major organ systems or Permanent inability to perform 4 out of 6 Activities of Daily Living or Cardiac complications with a permanent ejection fraction of less than 40% or Permanent inability to perform 3 Self-Care Activities of Daily Living Severity B Multiple organ involvement with reasonable response to therapy and normal daily functioning or Permanently inability to perform 2 Self-Care Activities of Daily Living Severity C Response only to triple medication therapy or Joint replacement as a result of a connective tissue disease or Failed response to more than 2 optimal disease modifying regimens Severity D Single system involvement, and good response to therapy Severity E Hypermobility syndrome or Ehlers-Danlos syndrome 68

70 6. Urogenital Tract and Kidney Benefit Definition: Rapid deterioration in renal function. Can be an acute, reversible condition or a chronic irreversible condition resulting in regular renal dialysis, either peritoneal or haemodialysis, or transplant Disorders of the urogenital tract or kidneys requiring ongoing therapy or major surgery. Diagnosis: Must be treated by a specialist Histology and relevant investigations must confirm the diagnosis and indication for dyalisis if applicable Gender reassignment surgery is excluded from this benefit. Severity A Chronic renal failure with ongoing permanent haemodialysis or a GFR of less than 15ml/min/1.73m² according to the MDRD study equation or Renal transplant or Ongoing permanent peritoneal dialysis Severity C Acute renal failure requiring more than five treatments of haemodialysis or Any disease or disorder requiring complete nephrectomy (donors excluded) or Total amputation of the penis or Any disease or disorder requiring complete cystectomy Severity D Vascular injury to the kidney or Any disease or disorder requiring partial nephrectomy or Partial cystectomy or Partial amputation of the penis Severity E Amyloidosis of kidney or Any disease or disorder requiring bilateral orchidectomy Severity F Urethral fistula or Vesico/recto-vaginal fistula or Chronic tubulointerstitial disease or Nephritic syndrome Severity G Renal abscess or Any disease or disorder requiring unilateral orchidectomy 69

71 Appendix 3 Severe Illness Benefits 7. Respiratory Disease Benefit Definition: Severe impairment of lung and airways function with resultant complications. Diagnosis: Must be treated by a specialist Relevant pulmonary and cardiac investigations must confirm the diagnosis Histology report must be available if needed Appropriate signs and symptoms must be present. Pulmonary function tests should be performed by a pulmonologist. The tests should include a post-bronchodilatation measurement and show a less than 5% variation between three successive FVC or FEV1 readings or two Dco test values within 3 units. Corrections should be made for anaemia and carboxyhaemoglobin on the Dco test. Severity A Presence of irreversible cor pulmonale or Pulmonary hypertension or Lung or heart and lung transplant Severity B Home oxygen therapy with permanent Dco less than 40% or Any disease or disorder requiring removal of more than one lobe of the lung or Pulmonary venous occlusive disease or Stage IV chronic obstructive airways disease (permanent FEV1 less than 30% of predicted) Severity C Severe irreversible changes in pulmonary function tests with permanent Dco 41-45% (obstructive and/or restrictive) or Recurrent pulmonary emboli with veno-caval filter inserted or Stage III chronic obstructive airways disease (permanent FEV % of predicted) Severity D Severe irreversible changes in pulmonary function tests with permanent Dco less than 50% (obstructive and/or restrictive) or Lung abscess or Empyema with drainage or Bronchopleural fistula Severity E Pneumocconiosis or Pulmonary embolus diagnosed on V:Q scan or D-dimer more than 1.0μg/ml and helical CT scan or Bronchiectasis or Any disease or disorder requiring pleurectomy or Decortication Severity F Pleural effusion requiring drainage or Near drowning requiring full resuscitation with systemic complications requiring ventilatory support Severity G Hyperbaric oxygen therapy for decompression sickness or Fibrosing alveolitis or Status asthmaticus requiring mechanical ventilation 70

72 8. Advanced AIDS/Accidental HIV Benefit Definition: Positive HIV (Human Immunodeficiency Virus) antibody with a confirmatory PCR test. Diagnosis: Severity A Advanced AIDS: Positive blood tests as specified above and CD4 cell count of less than 200 must be present while on antiretroviral therapy AND EITHER Three of the following five conditions must be present Weight loss of more than 10% body weight in less than six months Shingles Oral thrush Chronic diarrhoea Active tuberculosis. OR At least one of the following five diseases must be diagnosed: Kaposi s sarcoma under the age of 60 Pneumocystis carinii pneumonia Progressive multifocal leukoencephalopathy Active extra-pulmonary tuberculosis Pulmonary cryptococcus. Accidental HIV as a result of: Accidental needlestick injury acquired while rendering professional duties as a doctor/dentist/paramedic/nurse. A negative HIV test must be done within 24 hours of the needlestick injury or A road traffic accident or The transfusion of infected blood from a transfusion service recognised by Discovery Life or Receiving an organ transplant where the organ was previously infected with HIV or Rape or criminal assault or any other violent crime. The case must have resulted in the opening of a criminal case by the police. A negative HIV test must be done within 24 hours of the assault and a medical examination performed directly after the assault. 71

73 Appendix 3 Severe Illness Benefits 9. Musculoskeletal Benefit Definition: Diseases and disorders of muscle, bones and joints and the nerves that supply them. Diagnosis: Must be treated by a specialist Appropriate investigations and reports must confirm the diagnosis. Severity A More than 25% full thickness body surface area burns or Total and permanent loss of or loss of use of two limbs Severity B Total and permanent loss of use of or amputation of any limb (arm or leg) or More than 15% full thickness body surface area burns Severity C Total and permanent loss of use of a hand Severity E Traumatic amputation of any limb (arm or leg) requiring reimplantation surgery or Le forte III or IV reconstruction Severity F Chronic osteomyelitis or Reconstructive surgery to hands or limbs post amputation or Poliomyelitis resulting in permanent paralysis or Amputation of two or more digits or Suture of a major nerve to restore function to a hand or limb Severity G Cervical spine instability immediately post trauma requiring traction or emergency spinal surgery or Complete replacement of any joint due to a chronic disease process or Paget s disease or Amputation of digit or Osteoporosis resulting in collapse of more than one vertebra in ages under 65 years 72

74 10. Eye Benefit Definition: Disorders of globe, retina, optic nerve, cornea, lenses or drainage systems that result in impaired vision or blindness. Diagnosis: Ophthalmologist s report must be available Relevant investigations must confirm the diagnosis Signs and symptoms must be compatible with condition. Severity A Complete blindness Severity B Snellen rating 20/125 after best correction or Enucleation of eye Severity C Optic nerve atrophy or Permanent hemianopia or Complete blindness in one eye Severity D Retinitis pigmentosa Severity E Corneal transplant or Optic neuritis (one payment only) Severity F Retinal detachment or Macular degeneration Severity G Orbital abscess 73

75 Appendix 3 Severe Illness Benefits 11. Ear, Nose and Throat Benefit Definition: Diseases of the outer, middle, inner ear or neural pathways that relate to hearing and/or balance Diseases of the nose and sinuses. Diagnosis: Must be treated by a neurologist or Ear, Nose and Throat (ENT) surgeon Must have relevant signs and symptoms Relevant investigations and reports must confirm the diagnosis. Severity A Complete deafness under the age of 70 years Severity B Greater than 75% binaural hearing loss under the age of 70 years or Bilateral loss of 70dB over three frequencies (500, 1000, 2000Hz) in 2 measurements over six months after correction, in ages under 70 years Severity C Cavernous sinus thrombosis Severity D Acoustic neuroma or Chronic mastoiditis requiring radical surgery Severity E Chronic petrositis or Osteomyelitis of sinuses Severity F Tympanosclerosis Severity G Nose destruction as a result of a disease (trauma excluded) or Otosclerosis 74

76 12. Endocrine and Metabolic Diseases Benefit Definition: Diagnosis of or acute exacerbation of thyroid, pituitary or adrenal gland disorders Only one payment will be made for each disease. Diagnosis: Relevant blood tests and investigations must confirm the diagnosis Treatment must be done by a specialist Relevant signs and symptoms must be present. Severity E Diabetes insipidus or Acute adrenal crisis or Sheehan s syndrome or Thyrotoxic crisis Severity F Diabetic coma (one event only) or Conn s syndrome or Cushing s syndrome or Addison s disease or Pheochromocytoma or Glycogen storage diseases or Hypophysectomy Severity G Acromegaly or Insulinoma or Simmond s disease or Parathyroid tetany or Adrenalectomy 75

77 Appendix 3 Severe Illness Benefits 13. Child Severe Illness Benefit Definition: Additional child illnesses affecting children under 18 years of age that are not covered under the main Severe Illness Benefit, but included in this cover. Diagnosis: Must be made by a specialist in the relevant field Medical records and investigations must confirm the diagnosis. Severity C Surgical correction of congenital heart disease Severity E Congenital anomaly repair or Rheumatic fever with cardiac complications or Juvenile onset diabetes mellitus Severity F Poliomyelitis with permanent paralysis Severity G Juvenile rheumatoid arthritis, septic arthritis, osteomyelitis or Hirschsprung s disease or Surfactant therapy or Cleft palate/lip repair or Disorders of amino acid metabolism 76

78 Notes 77

79 Notes 78

80 Notes 79

81 Notes 80

82 GM_4354DL_25/08/09 Physical address: 155 West Street, Sandton. Postal address: PO Box 3888, Rivonia Contact centre number: (08600GROUP) Fax number: