Pension insurance protects you in the following three situations
A. Pensions and saving for retirement
The purpose is the maintenance of a proper standard of living on reaching retirement age .
The amounts received on retirement are usually split two parts :
Savings accumulated in capital plans received as a lump sum free of tax on retirement .
Savings accumulated in a pension fund or with an insurance company (pension track) received on retirement in the form of a monthly pension liable for tax in accordance with the tax bands .
B. Work disability insurance
Work disability is a situation where as a result of accident or illness the ability to earn as in the past is lost. The cover enables the receipt of compensation up to 75% of the reported salary. This compensation can be received by means of cover purchased from an insurance company or by means of a disability pension paid by a pension fundIn most cases the plan includes additional cover enabling release from payment of premiums into the various plans as had been customary prior to the loss of ability to work .
C. Insurance in case of death/ survivors pension
In case of the death of the member, it is our aim to ensure a reasonable standard of living for the beneficiaries.In the case of a pension fund, a monthly pension is received in accordance with the expected level of pension, family status and age of entry into the pension fund.Senior employees insurance enables the receipt by the beneficiaries of a lump sum insurance amount in case of death. The beneficiaries can be altered at any time by the insured person. In the case of a pension fund the beneficiaries are the survivors .
The budget :
Normally in the following format :
Employer :
8.33% of salary for severance pay 5% of salary for benefits
Worker :
5% of salary for benefits (Section 45)In addition: work disability cover is purchased within the budget up to 2.5% of the salary by the employer and/or the worker .
Comment :
At the present time, this cover may only be purchased from within the benefits deductions and on condition that it does not exceed 35% of the budget .
When planning pension insurance it is important to find the right balance between the needs of the survivors, for insurance/survivors pensions, protection in case of work disability and maximization of expected pension savings at retirement age .