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Information additional to your benefit statement

The following questions and answers will provide you with more details about some of the terms used in the statement.

Benefit Statement

Any reference to ‘plan’ in this statement means

  • a long-term policy as described and regulated by the Long-term Insurance Act, 1998;
    or
  • an investment plan that allows you to invest in a wide range of investment funds. Unlike a long-term policy, where the insurer pays tax on your behalf, all income and capital gains are taxed in your own hands. This is often beneficial to lower rate tax payers or people who do not make use of their annual interest and capital gains tax allowances.

It is the amount that you contribute to a plan. In the case of a long-term policy it is known as a premium.

Information is available on the Sanlam website at www.sanlam.co.za.

Yes, we calculate plan values, benefits and charges and manage a plan according to actuarial rules, as required by the Long-term Insurance Act, 1998.

The fund value gives an indication of the value of your plan. The full fund value is not necessarily available if the plan is terminated before the maturity or option date.

If your contributions are invested in a plan which is linked to the financial markets, your fund value will increase or decrease as market conditions change.

You will receive a termination value. This value may be less than the fund value, as it is not guaranteed and may change over time.

This is a portfolio where investment returns are smoothed by way of annual bonus declarations. Bonuses consist of a vesting part and a non-vesting part. Vested bonuses cannot be reduced or taken away. Non-vested bonuses may be reduced or taken away if financial market conditions deteriorate to the extent that the insurer deems this necessary.

If you make withdrawals before the maturity or option date, Sanlam will levy an early termination charge, and the fund value may also be adjusted to allow for the underlying market conditions and to be fair to the remaining members of the fund.

This is a fund where investment returns are smoothed by way of monthly bonus declarations. The fund value is available at maturity or the death of the insured and any bonuses added to the plan cannot be taken away, even if financial markets deteriorate. For withdrawals at any other time, the fund value is limited to the market value of the underlying assets, and may therefore be lower.

Reversionary bonus plan holders share in:

  • the investment returns on their respective underlying portfolios, as well as
  • the profits or losses resulting from differences between market value and the value of the benefits paid

Vested and non-vested bonuses will be added to the plan. The non-vested benefit may be reduced or taken away if financial market conditions deteriorate to the extent that the insurer deems this necessary.

If you withdraw the funds earlier than the maturity or option date, the present value of the expected benefit at maturity is payable. Depending on market conditions we may make a market adjustment when we determine the termination value.

  • The Long-term Insurance Act requires bonuses to be declared in accordance with the Principles and Practices of Financial Management (PPFM) of the insurer, as approved by its board of directors. The latest PPFM document is available from the Client Contact Centre or at http://www.sanlam.co.za/ppfm
  • The statutory actuary of the insurer must also be satisfied that it is actuarially sound to declare the bonus and that a surplus is available for this purpose.

An investment guarantee on a plan guarantees a certain return on the investment. For example, it may guarantee a minimum return over a certain period or a minimum maturity amount. Where an investment guarantee was added to a plan, the terms of the investment guarantee are fully explained in the plan contract.

The plan document originally provided to you has all the details about how the plan works and what benefits you are entitled to.

Retirement-related Information

It is the value that is available if you retire from the fund before the planned retirement date shown on your Benefit Statement. You may only withdraw these funds after age 55.

It is the value that is available if you want to transfer your fund benefits to another approved retirement fund.

It is the value you will receive if you become permanently disabled before age 55.

When you resign from the service of your employer you will receive the available resignation benefit of the plan at that specific date. The resignation benefit of qualifying fund plans includes demutualisation shares.

We recommend that you get professional advice about the different options which are available on the payment of your benefits and the tax implications thereof. If you are entitled to a retirement benefit from a retirement annuity fund, provident fund, preservation provident fund or preservation pension fund, you may take a portion of the retirement benefit in cash and the rest must be used to purchase a lifelong pension.

The benefits will be distributed amongst your dependents or nominees, or both. This is why it is very important that you nominate persons to receive the benefits and that you keep this updated. The Board of Trustees of the fund is bound by legislation (Section 37 C of the Pension Funds Act) to ensure that all your dependents are considered.

Unclaimed Benefits

We will communicate with you on the relevant date. If we determine that you are not reacting because your contact details have changed, we will continue the policy in an investment fund with stable growth rates and with no equity exposure.

Furthermore, we will take all steps that may be fairly expected to locate you, according to the Standard on Unclaimed Assets prescribed by the Association for Savings and Investment South Africa (ASISA), as available on the website www.asisa.co.za. We will take these steps 3 years and 10 years after the maturity date. Any administrative and locating costs will be deducted from the benefit amount and these costs will be disclosed if a payment occurs.

We will communicate with the claimant once we have been notified of the death event.

If the claimant does not respond to our correspondence, we will assume that the claimant’s contact details have changed and will take all steps that may be fairly expected to locate the claimant, according to the Standard on Unclaimed Assets prescribed by the Association for Savings and Investment South Africa (ASISA), as available on the website www.asisa.co.za. We will take these steps 3 years and 10 years after the notification of the death event. Any administrative and locating costs will be deducted from the benefit amount and these costs will be disclosed if a payment occurs.

If a savings and investment amount is payable, it will earn interest from the date on which the claim is admitted. The interest is equal to the growth of an investment fund with stable growth rates and with no equity exposure.

If a risk amount is payable, it will earn interest from the date on which the claim is admitted. The interest is equal to the growth of an investment fund with stable growth rates and with no equity exposure.

If the plan is still active when you turn 100 we will communicate with you to enquire whether you need financial advice for the plan.

If we do not hear from you we will assume that your contact details have changed and will take all steps that may be fairly expected to locate you, according to the Standard on Unclaimed Assets prescribed by the Association for Savings and Investment South Africa (ASISA), as available on the website www.asisa.co.za. We will take these steps 3 years and 10 years after establishing that we no longer have the correct contact details for you. During this period the plan will continue unchanged.

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