DISABILITY INCOME PROTECTION TotalCareMax Adviser information

Transcription

1 Life Disability Income Protection Adviser information DISABILITY INCOME PROTECTION TotalCareMax Adviser information Life. Take charge. sovereign.co.nz

2 HOW SOVEREIGN S DISABILITY INCOME PROTECTION COVER HELPS YOUR CLIENTS TAKE CHARGE Sovereign s Disability Income Protection cover can pay your clients a regular monthly benefit to replace their income if they are unable to work due to illness or injury. Sovereign offers three types of Disability Income Protection cover: Agreed Value, Indemnity, or Loss of Earnings. 1 Agreed Value: This cover type provides an agreed monthly benefit based on a proportion of income (before tax) disclosed at the time of application. This means that your clients don t need to supply proof of pre-disability income at claim time in order to receive a benefit. Agreed Value cover is generally not subject to tax, meaning that premiums are not tax deductible and any benefits received will not be assessable for tax. Please note that this is our interpretation of tax law as at the date of publication (October 2015); your clients may prefer to obtain their own tax advice. 2 Indemnity: This cover type pays a monthly benefit based on a proportion of pre-disability income (before tax) at claim time. The benefit is paid up to a specified maximum selected at time of application. This means that your clients need to supply proof of pre-disability income when they lodge a claim. Indemnity cover is generally taxable, meaning that premiums are tax deductible and any benefits received will be assessable for tax. Please note that this is our interpretation of tax law as at the date of publication (October 2015); your clients may prefer to obtain their own tax advice. 3 Loss of Earnings: Loss of Earnings cover offers your clients the flexibility of either an Agreed Value or Indemnity style benefit. At claim time, your clients have the option to receive an Agreed Value style benefit or to provide evidence of pre-disability income in order to receive a potentially higher benefit. Loss of Earnings cover is generally taxable, meaning that premiums are tax deductible and any benefits received will be assessable for tax. Please note that this is our interpretation of tax law as at the date of publication (October 2015); your clients may prefer to obtain their own tax advice. Offsets The amount of benefit payable under each cover type will be reduced by the applicable income offsets. These offsets include any other income replacement benefits received in connection with the disability (including ACC payments) and any earned income (including sick leave of up to 10 days). Passive income, such as investment or rental income, will not reduce the benefit payable to your clients. Choice of Benefit Payment Period The benefit can be paid for 1 year, 2 years, 5 years, to ages 65, or to age 70. In general, shorter Benefit Payment Periods are lower cost. Please note that the to age 70 Benefit Payment Period is only available for occupation classes 1 to 4. Waiting periods The waiting period is the period of time that your clients are required to wait after disability occurs before they receive their first benefit payment. We offer a choice of seven waiting periods: 2, 4, 8, 13, 26, 52 and 104 weeks. In general, longer waiting periods are lower cost. Disability Income Protection Adviser Information Page 2 of 10

3 Did you know? Every 20,000 year around people are diagnosed with cancer 1 There are over 48,000 people with dementia in NZ 2 The total amound of Disability Income Protection claims paid by Sovereign in the 12 months to June was $40 MILLION3 There 300 are approximately people living with Motor Neurone Disease in New Zealand, at any one time 4 An INCREASING number of people in New Zealand are disabled 5 Source 1 Cancer supportive care, Ministry of Health Alzheimer s New Zealand website Sovereign business data, 30 June Motor Neurone Disease Association 5 Statistics New Zealand Disability Survey = 24% 2006 = 20% Children aged 0 to 14 years 11% Aged 15 to 64 years 21% Aged 65 years or older 59% The information in this document is provided as a sales support tool to be used in conjunction with and subject to the appropriate policy wording. Disability Income Protection Adviser Information Page 3 of 10

4 BUILT IN BENEFITS Total Disability Income Benefit If your clients are totally disabled as a result of sickness or injury and remain totally disabled beyond the waiting period, they may receive the monthly income benefit commencing immediately following the waiting period. If your client has been on leave without pay for more than 12 months or was unemployed for more than 3 months prior to becoming totally disabled, then the maximum benefit payable will be $1,000 per month less offsets. 1 Definition of totally disabled for all occupation classes (other than class 5) In Sovereign s opinion, after considering the advice of a Registered Medical Practitioner and other relevant information, the life assured for the Benefit is so seriously incapacitated by illness or injury that they are: > > unable to follow the occupation or carry on the business they were involved in immediately before the disablement date for more than ten hours per week; or > > unable to perform the key income producing duties of the role they were involved in immediately before the disablement date for more than ten hours per week; and > > in each case, not in fact working, or engaged, in any other occupation or business. 2 Definition of totally disabled for occupation class 5 In Sovereign s opinion, after considering the advice of a Registered Medical Practitioner and other relevant information, the life assured for the Benefit is so seriously incapacitated by illness or injury that they are continuously confined under full-time care to the life assured s home or a medical institution. Partial Disability Income Benefit The Partial Disability Income Benefit provides your clients with a monthly payment as they gradually return to work in a reduced capacity following a period of total disability. If the following circumstances apply: > > the life assured has been totally disabled for a continuous period of at least 14 days, and > > as a result of the disability the life assured is able to return to work in a reduced capacity and the life assured earns less than 75% of their pre-disability income, then your client may be eligible to receive the Partial Disability Income Benefit during the period that they are partially disabled after the end of the waiting period. This Benefit applies to all occupations other than occupation Class 5. The Partial Disability Income Benefit provides your clients with financial relief as they recover from their condition and transition back to work. Partial Disability Bridging Benefit If your clients transition from a Total Disability Income Benefit to a Partial Disability Income Benefit, they may receive a Partial Disability Bridging Benefit. This will be a benefit payment equal to one third of the final Total Disability Income Benefit payment. The Partial Disability Bridging Benefit will only be paid once for all claims resulting from the same or a related disability. The Partial Disability Bridging Benefit addresses a potential two month gap in claim payments due to the transition from a benefit paid in advance (Total Disability) to a benefit paid in arrears (Partial Disability). Disability Income Protection Adviser Information Page 4 of 10

5 Enhanced Partial Disability Income Benefit The Enhanced Partial Disability Income Benefit assists your clients to return to work in a reduced capacity by increasing the Partial Disability Income Benefit. Sovereign will pay an Enhanced Partial Disability Income Benefit if: > > The life assured has been receiving a Total Disability Income Benefit; > > The life assured is no longer totally disabled; and > > The life assured is entitled to receive a Partial Disability Income Benefit. The Enhanced Partial Disability Income Benefit is paid for a maximum period of 12 months. The Enhanced Partial Disability Income Benefit may further supplement your client s income as they return to work in a reduced capacity. Recurrent Disablement Benefit If within 12 months of your client s recovery, they become totally disabled again through a related illness or injury, we will waive the waiting period on their Disability Income Protection Benefit. For Recurrent Disablement claims, if the Benefit Payment Period is one, two or five years, then the remaining Benefit Payment Period will be reduced by the Benefit Payment Period on the original claim to which the Recurrent Disablement Benefit relates. If your client suffers a relapse of their total disability, they are able to return on claim without being required to re-serve their waiting period. Vocational Retraining Benefit This Benefit allows for a lump sum payment should your client undertake an approved vocational retraining course to assist in their return to employment. The Vocational Retraining Benefit supports them to obtain a new set of skills or qualifications and to return to work. The Vocational Retraining Benefit enables your clients to access approved retraining programmes to enable them to return to work. Home Modification or Equipment Expenses Benefit This Benefit allows for a lump sum payment towards the costs of necessary specialised equipment or approved home alterations required as a result of total disability. Clients must apply in writing to Sovereign for approval before incurring these expenses. This Benefit helps fund the costs of home modifications and equipment necessary to assist your client to function with their disability. Disability Income Protection Adviser Information Page 5 of 10

6 Bed Confinement Benefit If your client is confined to bed under the full time care of a nursing service or a Registered Medical Practitioner they could be eligible for a benefit for each complete 24 hour period of confinement, after the first 72 hours of bed confinement. This benefit applies to all occupations other than occupation Class 5. This benefit can ease additional costs that may be incurred during the waiting period. Suspension of Cover Your clients are able to suspend their cover for up to 12 months whilst on parental leave or leave without pay and then reinstate their cover without any underwriting. No benefits will be payable for any disability which occurs during any suspension period. This benefit provides your clients with the flexibility to suspend and reinstate their cover upon their return to work without the need to provide further medical evidence. Back to Work Payment The Back to Work Payment encourages your client to return to work and is paid as a lump sum benefit equal to three times the final monthly benefit. Sovereign will pay a Back to Work Payment if: > > A disability income benefit has been paid for a life assured for a continuous period of longer than 12 months but less than 24 months; > > The life assured is no longer totally disabled or partially disabled; and > > The life assured has ceased to be on claim with Sovereign. The Back to Work Payment is available for 5 year, to age 65 or to age 70 benefit payment periods. Gainful employment can have a positive effect on your client s welfare and confidence. This Benefit encourages your client to return to work after an extended period of absence from the workplace. Waiver of Premium The premium is automatically waived whilst your clients are on claim. The Waiver of Premium Benefit is also available as an optional benefit with the full range of Sovereign s TotalCareMax and Private Health products. The Waiver of Premium Benefit removes the burden of paying premiums whilst your clients are on a disability claim. Disability Income Protection Adviser Information Page 6 of 10

7 OPTIONAL BENEFITS Optional Mental Health Limitation This optional feature might enable your clients to reduce their premium by limiting the benefit payment period to 2 years for all mental health claims. Optional Benefit Indexation Your clients have the option to increase their Disability Income Protection Benefit each year in line with the consumer price index. This option maintains the real value of your clients Disability Income Protection Benefit. Optional Future Insurability Benefit If your clients do not select the Benefit Indexation option, they are able to increase their Disability Income Protection Benefit, every three years, without medical underwriting until they reach age 55. To apply for an increase under the Future Insurability Benefit, your clients must advise Sovereign within 60 days either side of every third policy anniversary. Your clients may increase their benefit amount by 10% of the original Disability Income Protection Benefit up to a maximum of $12,000 per annum. This Benefit is only available if your client s Disability Income Protection Benefit is less than $240,000 per annum, including increases under the Future Insurability Benefit. Please note that your clients cannot exercise an increase under the Future Insurability Benefit if they are on claim or if they are entitled to receive a claim for a disability suffered on or before the date of the application. This Benefit gives your clients the option to increase their monthly benefit every three years without any medical underwriting. Premier Cover Option The Premier Cover Option is available as an optional addition to the Income Protection Cover and provides the following extra benefits: > > No sick leave offsets > > Enhanced Bed Confinement Benefit > > Extra Cash Benefit > > Permanent Disablement Benefit > > Home Care Benefit > > Bereavement Grant Please refer to the policy document for further information about these benefits. This option provides more money in a variety of circumstances to lessen the impact of being disabled. The information in this document is provided as a sales support tool to be used in conjunction with and subject to the appropriate policy wording. Disability Income Protection Adviser Information Page 7 of 10

8 OPTIONAL ADD-ON BENEFITS Optional Add-On Benefits Please note that these add-on benefit options are subject to their own terms and conditions, which differ from the Disability Income Protection Benefit. Please refer to the applicable policy document. Add-On Retirement Protection Benefit The Retirement Protection Benefit helps your clients continue saving for their retirement by making contributions into their Kiwi Saver account whilst they receive a Total Disability Income Benefit. This optional Benefit provides your clients with the certainty of knowing that their retirement savings will continue whilst they re on a total disability claim. This Benefit pays an agreed contribution directly to Inland Revenue and also enables clients to continue receiving any member tax credits. Add-On Redundancy Benefit The Redundancy Benefit provides your clients with a monthly benefit if they are made redundant. The maximum benefit available is $4,000 per month for up to six months. A minimum waiting period of 4 weeks applies, which may be extended up to 13 weeks. The Redundancy Benefit is not payable to clients who are self-employed or not earning an income prior to redundancy. Please note that Sovereign will not pay a Redundancy Benefit if the client is made redundant within six months of cover commencing under this add-on benefit. The Redundancy Benefit is not generally assessable for tax. Please note that this is our interpretation of tax law as at the date of publication (October 2015); your clients may prefer to obtain their own tax advice. Add-On Specialist and Diagnostic Testing Benefit with Best Doctors Sovereign offers the Specialist and Diagnostic Testing Benefit with Best Doctors as an optional benefit with Disability Income Protection. This Benefit can make a real difference to the timeliness and choice of your client s specialist medical advice. The Specialist and Diagnostic Testing Benefit provides cover for up to $5,000 per year for specialist consultations, diagnostic imaging and tests. In addition, Best Doctors offers your clients the opportunity to seek a second opinion from an international network of medical specialists. Some specialists and diagnostic tests are not covered. Please refer to the policy document for details. Best Doctors is a trademark of Best Doctors, Inc., in the United States and other countries, and is used under licence. Exclusions A Disability Income Protection Benefit will not be payable where any of the following directly or indirectly cause or contribute to the disability: > > Deliberately injury or attempts to do so. > > Engaging in or being part of any conduct that is criminal. > > Pregnancy or childbirth, unless the disability lasts for more than 90 days after the end of pregnancy, in which case the Waiting Period will start from the 91st day. > > Failure to comply with the treatment recommended by the attending treatment providers. No monthly benefit will be payable during any term of imprisonment. Disability Income Protection Adviser Information Page 8 of 10

9 Dedicated support team We have a dedicated claims team who specialise in rehabilitation, supported by a panel of registered medical doctors. > > Health Screen nurses to help with underwriting and claims. > > Dedicated underwriters who provide a telephone underwriting service. Related tools We have a number of tools available to help you and your clients understand Disability Income Protection: > > Disability Income Protection Benefit customer guide. > > Mortgage and Income Protection customer guide. > > Specialist and Diagnostic Testing customer guide. Disability Income Protection Adviser Information Page 9 of 10

10 sovereign.co.nz Sovereign House 74 Taharoto Road, Takapuna, Auckland 0622 Private Bag Sovereign, Victoria Street West, Auckland 1142 Telephone: Fax The availability of insurance cover is subject to your client s application being approved. All applications are subject to individual consideration. Special conditions, exclusions and premium loadings may apply. The information contained in this publication is general in nature and is not intended as advice. It may not be relevant to individual circumstances. For full details of the products and benefits offered by Sovereign, please refer to the policy document(s) which are available from Sovereign. Disability Income Protection Adviser Information Page 10 of This insurance is underwritten by Sovereign Assurance Company Limited ( Sovereign ). Copies of our disclosure statements are available on request, free of charge. Sovereign, the policy insurer, is part of the Commonwealth Bank of Australia Group and is a related company of ASB Bank Limited and its subsidiaries ( the Banking Group ). None of the Banking Group, the Commonwealth Bank of Australia, any of their directors, or any other person, guarantees Sovereign or its subsidiaries, or any of the products issued by Sovereign or its subsidiaries.