Two ways life cover can help you achieve financial security beyond protecting your income

The risk of a temporary or permanent disability or illness that affects our ability to work is a reality for us all.

An income protection benefit on a life insurance plan can help by giving you financial security in these circumstances.

Why should you have a benefit that protects your income?

"For most of us, financial security is achieved by our ability to work and earn an income. Yet, we're all vulnerable to certain risks which could affect that ability, threatening our financial security and having a serious impact on our quality of life," explains Daniel Stoch, Head of Market Analytics and Research and Development at Discovery Life.

"This is where a benefit that's designed to protect your income if an illness or disability affects your ability to earn can be so valuable."

"Take Discovery's Income Continuation Benefit, for example," says Stoch. "It pays an income that would otherwise be lost because of an illness or disability that impacts your ability to work, and provides cover for whole-of-life.

How Discovery's Income Continuation Benefit works

In these circumstances, the benefit ensures you still get up to 100% of your salary, and additional payouts, in place of what you would have earned - helping to maintain your quality of life. The benefit also provides automatic protection after age 65, which means that a claim does not necessarily end at retirement age.

Furthermore, the benefit also gives you the chance to build up value that you can benefit from in retirement. "This is done through the Income Continuation Fund, which builds up while you are healthy and not claiming," Stoch explains.

Here's how it works:

• For an extra premium, we put 100% of your insured amount (a 13th cheque) into a fund for you.
• Every year for the next 20 years or until you turn 65 (whichever happens first), we deposit an extra 100% of your insured amount into this fund. The fund grows every year based on your selected benefit increase, and how well you manage your health and wellness.
• When you turn 65, the total amount in the fund is paid out in 10 equal tax-free payments. The first payment is made at the end of the month in which you turn 65.

"This means you can convert your health and wellness into a tangible asset," Stoch says. "If you manage your overall health well, it can build up to an amount that can really benefit you in your retirement years."

Income Continuation Benefit options

As a Discovery Life client, you can choose from the Essential Income Continuation Benefit or Comprehensive Income Continuation Benefit options.

The Comprehensive option is available on a Smart, Classic or Purple Life Plan. It allows you to translate improvements in health and wellness into income that can help to boost your retirement savings. The Essential option is available on the Essential Life Plan.

Some of the key features of Discovery Life's Income Continuation Benefit include:

• Automatic whole-of-life protection at a lower premium than comparable products in the industry.
• Boosted payouts on permanent disability. On the Comprehensive option, we remove your waiting period and boost your insured amount by paying 2.5 times, up to 100% of your income after tax, if you become permanently disabled. On the Essential option, we boost the insured amount by 1.33 times.
• Automatic lifestyle protection on the Comprehensive option that covers various circumstances, including:
  • The Contribution Protector, which gives you automatic cover so you can pay contributions and premiums on certain Discovery products for up to 24 months after claiming.
  • The Family Protector Benefit, which pays out if your spouse or child experiences a life-changing event.
  • The Maternity Premium Waiver Benefit. With this benefit, you don't have to pay your Life Plan premiums for four months after childbirth.

Not all Discovery Life Plans qualify for these benefits - please speak to your financial adviser to find out more.

Boost your financial security using income protection with these limited offers from Discovery Life

"From 1 April 2022 to 15 December 2022, new and existing clients who add the Income Continuation Benefit for the first time will have access to two limited offers that can really give their overall financial security an added boost," says Stoch. "These are the 150% Income Continuation Benefit and Buy-up Income Continuation Fund offers."

1. The 150% Income Continuation Benefit offer
   
   With this offer, clients will get 150% of their total monthly claim paid out for two years if they have a qualifying Category A disability.
   
   What is a Category A disability?
   Category A conditions are serious or severe impairments that cause a permanent disability - that is, a disability that does not go away, even after treatment. Examples include certain cardiovascular conditions, cancers, and respiratory, nervous system and musculoskeletal conditions. Discovery Life's terms for claims apply.

"Discovery Life recognises that when a client experiences a Category A disability, they often need extra financial security to help them adapt to the immediate impact it has on their lifestyle," says Stoch. "This boosted amount pays out as soon as the disability has been confirmed as permanent, ensuring clients are well taken care of financially almost immediately after being diagnosed."

2. The Buy-up Income Continuation Fund offer
   
   With this offer, clients get a 20% discount on their premiums for the Income Continuation Benefit and Top-up Income Continuation Benefit, for three years, when they add the Buy-up Income Continuation Fund.

"This offer gives our clients access to market-leading income protection at a discounted rate" explains Stoch "and is designed to reward our clients for recognising the importance and value of protecting their income for the long term and using their health and wellness to generate significant value from the age of 65."

"Both offers give clients a level of financial security that goes above and beyond just securing their income. As a client, you benefit whether you lose your ability to earn an income or not. Either way, you get to a level of financial security that takes care of your quality of life for the long term," he concludes.

Speak to your financial adviser about the 150% Income Continuation Benefit and Buy-up Income Continuation Fund offers.