Pretoria Business Sickness Insurance

Kind regards

George van Zyl

Sickness relating to Keyman Insurance

Sickness as relating to Keyman Insurance (Part 1) - Brokers Legal & Law CC

Twin brothers, Jabo and Julius, are both qualified professional. Jabo is a qualified doctor and a member of an incorporated practice while Julius is the senior pharmacist at a privately owned pharmacy.

Although they both work in different organisations both make a significant contribution to the profit in their respective businesses. Julius and Jabo enjoyed the outdoors and used every opportunity they had to explore their country.

Their last road trip however was not that enjoyable, as the brothers were involved in a serious motor accident, leaving them unable to work for a period of up to three months. The brothers were not that concerned about their personal income as they insured themselves with the Cobalt for Professionals Sickness Benefit which paid their respective claims from day one.

However their respective businesses were not in the same position as their absence from the business resulted in a loss in earnings, putting a strain on the cash flow and operational costs of the business. The situation could have been avoided if their businesses had insured their lives with Cobalt for Professionals Sickness Benefit for Keypersons.

A benefit that is unique to Sanlam. This benefit partially protects the business income should a professional key person be temporarily unable to work due to sickness or injury. As Jabo is a member of an incorporated practice and Julius is a salaried senior pharmacist the application of the benefit in terms of the amount they may be insured for by their businesses varies. Let’s look at Jabo’s situation.

The incorporated practice charges a fee for their service. Jabo’s contribution to the incorporated practice is R100 000 per month. However Jabo’s take home pay is only R70 000 - 70% of his contribution towards the practice. His Cobalt for Professionals Sickness Benefit equals 66% of his take home pay. A tax free amount of R46 200. With Jabo’s temporary absence from the practice his personal income is protected but the incorporated practice is out of pocket to the tune of R30 000.

Cobalt for Professionals Sickness Benefit for Key Persons remedies this situation allowing the incorporated practice to insure Jabo’s life for an amount equal to 66% of R30 000 which is R19 800 replacing some of the loss incurred as a result of Jabo’s temporary absence from the practice.

Let’s look at Julius’s situation. Julius earns a salary of R40 000 per month working at the pharmacy. His Cobalt for Professionals Sickness Benefit equals 66% of his salary. A tax free amount of R26 400. With Julius’s temporary absence from the pharmacy his temporary absence is protected .

However the pharmacy is not in the same position as it loses out on business earnings. Cobalt for Professionals Sickness Benefit for Key Persons remedies this situation allowing the pharmacy to insure Julius’s life for an amount equal to 66% of his monthly salary which is R26 400 replacing some of the loss it would have incurred as a result of Julius’s temporary absence from the pharmacy.

The Sickness Benefit for Key Persons offers a business numerous benefits. The benefits can be used to pay for a replacement in the absence of the Key Person or compensate for the loss of business earnings. It also limit’s the impact on the cash flow and operational costs of the business providing peace of mind to the business owners. The business has the option to structure the Sickness Benefit for Key Persons in a tax efficient manner. For more information about the Cobalt for Professionals Sickness Benefit for Key Persons please speak to your Sanlam advisor or a credited broker.

This Cobalt for Professionals pod cast was brought to you by Sanlam.

Please do not hesitate to contact me should you wish to discuss this further. Kind regards

George van Zyl

Brokers Legal & Law CC
FSP no: 12430
97 Nicolson Street, Brooklyn, 0181
PO Box 30378, Sunnyside, 0132
Tel: 012 346 5664
Cell: 083 627 2778
Fax: 086 726 0506