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Insurance Glossary

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A

Actively at work: Actively at work means that the member must be at work, attending to and capable of fulfilling his or her normal daily duties.

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, taking into account the physical, social and interactive abilities of a person.

Approved policy: 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 1956. The trustees of the fund will therefore formulate a trustee resolution on the distribution of the death benefit, taking into account any dependants, beneficiaries and nominees, in this order. An approved policy is also governed by the Income Tax Act.

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B

Benefit expiry age: Once the member reaches this age, he or she will no longer be covered. The benefit expiry age may be selected by the member, but it is usually the age at which the member will retire.

Benefit payment: 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.

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C

Capital Disability Benefit: Pays a lump sum amount if any assured lives are medically impaired to the degree that they suffer a permanent loss of the majority of their income, or are totally and permanently unable to perform their nominated occupation due to injury or illness.

Child: 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;
  • a dependent stepchild of the member, under the age of 21 years;
  • a foster child of the member, under the age of 21 years;
  • a child under the age of 21 years, legally adopted by the member;
  • a stillborn child (death of the foetus after the 26th week of pregnancy) born to the member.
  • 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.
  • a child of the member who studies full-time at a recognised educational institution and who has not reached the age of 24.

Child Severe Illness Benefit: If the member or spouse is covered for the Severe Illness Benefit, an amount of severe illness is automatically included for the children.

Contribution Protector™: Pays the member’s contributions for the Individual LIFE PLAN, Discovery retirement Optimiser™, Discovery Health Plan, contributions to other medical schemes, Vitality and Discovery Retirement Annuities.

Continuation option: The continuation option may be selected by the policyholder to enable members to take up individual LIFE PLANS with Discovery Life for the same benefits they enjoyed under the Group Risk LIFE PLAN.

CORE Benefits: CORE Benefits are compulsory for and applicable to all members. They include the Life Cover Benefit and Income Continuation Benefit.

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D

Discovery Life Group Risk LIFE PLAN: The Discovery Life Group Risk LIFE PLAN includes various combinations of benefits that can be chosen by the policyholder.

Dynamic Spend Protector™: Boosted discounts at Discovery’s partner stores are provided to a member that becomes permanently disabled.

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E

Eligible employee: An eligible employee is 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 is 18 years or older.

Escalation in claim benefit: This benefit allows income payments to policyholders to increase annually, in line with inflation.

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F

FLEX Benefits: FLEX Benefits are not compulsory and may be selected by members depending on their risk needs. These benefits provide increased cover and are 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.

Funeral Cover Benefit: A lump sum benefit is paid to cover the cost of a funeral for the member, spouse or child.

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G

Global Education Protector: Provides cover for the education of a member’s child/children in the event of his or her death.

Global Treatment Benefit: Provides the member with access to a range of US hospitals in the hospital network used by Discovery Life.

Group Risk LIFE PLAN Guide: This is our terms and conditions. It provides comprehensive information on all the benefits offered by Discovery Life Group Risk.

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H

Hazardous activity: A hazardous activity is generally excluded or the premium is increased on standard insurance policies. The activities include bungee jumping, scuba diving and sky diving among others.

Health Dividends™: This is an annual amount paid to the policyholder by the Health Plan Protector and is calculated on a percentage of his or her “unused” health contributions.

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I

IMPAIRMENT FUND: If the Severe Illness Benefit is selected as a standalone benefit, the IMPAIRMENT FUND becomes the financial mechanism of the LIFE PLAN and is used to fund severe illness payouts.

Income Continuation Benefit: A regular income is paid if the policyholder experiences a loss of income upon injury or illness rendering him or her incapable of performing his or her nominated occupation.

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L

Life assurance: An insurance policy that, in return for the payment of regular premiums, pays a lump sum on the death of the insured.

Life-changing event: This is defined as death, disability or a severe illness that is severe enough to affect your lifestyle or your ability to earn an income and so lowers your standard of living.

Life Cover Benefit: Policyholders are covered when they die.

LIFE FUND: The LIFE FUND is the financial foundation of the LIFE PLAN. The LIFE FUND is used to fund benefit payments for the benefits selected by the policyholder.

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M

Minimum Protected FUND: The Minimum Protected FUND allows the policyholder to specify a minimum level of protection 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.

Mortgage Protector Benefit™: Pays an employee’s bond repayments for up to 24 months if he or she becomes disabled or dies.

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N

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.

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P

Performance Bonus Protector™: Pays up to 100% of an employee’s past bonuses if they become permanently disabled for up to 24 months

PLUS Benefits: Plus benefits cover additional member risk needs and ensure that all members enjoy an additional level of protection. These benefits are compulsory and to all members on the scheme.

Pre-existing conditions: A pre-existing condition is a medical condition that the member knew about or for which they sought medical attention in the past.

Private School Upgrade Benefit™: Allows a child currently in a public school to upgrade to a private school.

Progressive illnesses: At the time of the first claim, Discovery Life will evaluate the severity of the illness according to the severity rating scale. If the illness becomes more severe at a later date, Discovery Life will reassess it‘s severity rating.

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R

Rehabilitation benefit: The purpose of the rehabilitation benefit is to assist the claimant to achieve a level of performance to enable him or her to perform any gainful employment.

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S

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 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. 

Severe illness: An illness or disorder that significantly affects a person’s lifestyle.

Spouse: A spouse is defined as the person that the policyholder is legally married to and includes:

  • a party to 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 policyholder in the manner of a spouse, living in a relationship of mutual dependence with the policyholder, and running or sharing a common household with the policyholder, or
  • a person regarded by the policyholder as a common law spouse

Spouse’s Life Cover Benefit: Provides cover for a member’s spouse should he or she die.

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U

Unapproved policy: 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 according to 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.

Upgrade on permanent disability: If a member meets Discovery Life’s Category A criteria for the Capital Disability Benefit, monthly payments will be increased. The benefit for a member receiving 75% of pre-disability income will increase to 100% of this income.

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V

Vitality: Vitality is a wellness programme that empowers policyholders to improve their health by giving them the knowledge, tools and motivation to set and meet health goals.

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W

Waiver of premium: Some insurance contracts have a provision in place which allows the insurance company to waiver the collection of premiums while keeping the policy in force if the policyholder becomes unable to work because of an accident or injury.

Waiting period: A certain period of time that passes after a life-changing event before a policyholder can receive insurance benefits.

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Glossary is courtesy of www.discovery.co.za