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Financial Planning

Let’s get technical – Cover for Business Owner

Elmarie Samuel, Product Marketing Specialist at FMI (a Division of Bidvest Life Ltd)

As one of the main drivers of economic growth and job creation, all business owners should not only protect themselves, but their businesses too; so that no matter what happens to them, their businesses are protected and can continue operating.

Since inception, FMI has supported business owners by providing a monthly income to cover their salaries and business overheads when they couldn’t work due to injury or illness. Over the years, we’ve innovated our product to include a combination of income and lump sum benefits that provide a payout for injury, illness and death.

At our recent monthly Technical Tuesday webinar, I sat down with our Chief Product Actuary, Leza Wells, to chat about FMI’s cover for business owners:  

How does FMI cater for different types of busines owners?

We offer two versions of FMI Individual – Comprehensive and Event Based cover. Our Event Based cover solution offers cover to those individuals who may not qualify for Comprehensive cover due to their specific occupation insurance risk. This gives more people access to insurance and allows advisers to access a wider pool of customers in the market.

Which benefits are relevant for a business owner?

As a financial adviser, there are two key considerations when selecting income cover for your business owner clients, namely business overhead income benefits and continuation of income if they pass away.

We see the ability to protect the income of the business owner as a primary need. In addition to income protection, we also offer business overhead protection, which covers business operating expenses in the event of a business owner falling ill or getting injured. 

A Life Income policy for your business owner clients ensures the continuity of the business in the event of their death by paying up to R150 000 per month for either 6 or 12 months. This can assist with providing a monthly income to pay for the ongoing monthly expenses while a suitable successor is found or trained to take over their responsibilities, which could make all the difference for a business’ survival.

What makes FMI’s income protection for business owners different compared to others in the market?

Loss of income claims criterion. Many insurers assess business overhead claims under a Loss of Income criterion, which can be difficult to prove if the loss of income doesn’t coincide with the period of injury or illness. That’s why it’s important to choose a policy which allows a claimant to choose between loss of income or percentage of duties unable to perform, whichever is greater for them.

Speed of payments. Speed of claim payment is crucial for business owners who need to pay staff and suppliers. FMI’s Fast-Track Event claims, for example, offer a simplified claims process with payments based on receiving objective medical evidence. This results in faster claim payments because we don’t have to wait for medical professionals to complete an occupational disability assessment. Plus, the first 60 days of the guaranteed claim period are paid upfront on acceptance of the claim.

Shorter waiting periods. While it’s common for business owners to qualify for a 7-day waiting period on their temporary income protection benefit, this often isn’t available for manual occupations. At FMI, the 7-day waiting period is also available to most occupations that perform manual duties such as self-employed plumbers, electricians and mechanics. And on our Event Based cover, business owners can claim from day one for most injuries or illnesses.

There is a massive knock-on effect if a business owner cannot work due to injury, illness or death.

Our product solution doesn’t only protect the business owner, but it also provides security for the business as a whole, the employees and all those who depend on them.  

If you enjoyed this excerpt and would like to watch the full Technical Tuesday webinar, simply click here.


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