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Your loved ones are depending on you to make the right financial decisions while you’re alive so that they can have a chance of building a financial future for themselves. Leaving your dependants financially secure when you die could potentially be one of the most important aspects of your personal financial plan. You need the ability to structure your wishes according to your personal requirements.
In some cases, leaving a lump sum to your beneficiaries can be a mistake. Many beneficiaries don’t have the knowledge or experience to manage large lump sums of money. You may need a solution that makes the life cover policy you have in place accordingly adaptable, which means that when the claim is submitted and the policy proceeds are paid, it pays out a monthly income instead of a lump sum.
Liberty has enhanced its Lifestyle Protector Offering with the Death Income feature. You can choose to have a monthly income paid to your beneficiaries in the event of your death. This ensures that money is available to reduce the financial impact of your death. It also gives you the peace of mind that comes with knowing that you’re protecting their future and ensuring that their needs are met.
The Death Income feature has been added to the Lifestyle Protector offering. This gives you more flexibility in deciding how your life cover will be paid out to your beneficiaries at claim stage. For each beneficiary, the policyholder will now be able to ensure that a proportion of their allocated sum assured is paid out as a lump sum, with the balance allocated to provide an income to the beneficiary. The income will be facilitated through the purchase of a suitable Liberty investment product (eg the Guaranteed Income Annuity).
How you could use this feature to provide your beneficiaries with an income
Let’s say you bought R2 million in life cover to provide for your family should you pass away and you want 50% of the life cover to be paid to your spouse while the balance must be equally shared between your two children, aged 18 and 21. Your preference is also for your children to receive a monthly income for at least five years.
| Beneficiary |
Beneficiary Split |
Proportion Allocated to Income |
Minimum Income Term |
| Spouse |
50% |
- |
- |
| First child |
25% |
90% |
5 years |
| Second Child |
25% |
80% |
5 years |
Two years later, you unfortunately pass away. R1 million is paid to your spouse. Your first child receives R50 000 as a lump sum and R450 000 is used to buy a Liberty investment product that will provide a monthly income for the next five years.
Your second child would receive R100 000 as a lump sum and R400 000 would be used to purchase a Liberty investment that pays an income for five years. However, this child could decide to invest the full R500 000 in a Liberty investment that would for instance pay a monthly income for a longer term of, say, seven years.
This option has been available to new policyholders since 26 May 2018 via the beneficiary nomination process and existing clients have had access to this feature since 23 June 2018. If this sounds like the right solution for you and your family, speak to your financial adviser today and make sure that your family is well cared for in the event of your death.
The information contained in this document should not be regarded as financial advice by Liberty. Any legal, technical or product information contained in this document is subject to change from time to time. This document is a summary of features of the product. If there are any discrepancies between this document and the contractual terms, the latter will prevail. Any recommendations made must take into consideration the clients' specific needs and unique circumstances.
Liberty Group Ltd is the Insurer of Lifestyle Protector and an Authorised Financial Services Provider in terms of the FAIS Act (no. 2409). Terms and Conditions apply.
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