8.18 how does the cover Integrator work?
You may establish your LIFE PLAN to include a LIFE FUND as well as the Cover Integrator. The Cover Integrator provides additional Integrated Cover to the LIFE FUND with two options being available:
option 1: Integrated Cover equal to 20% of the LIFE FUND option 2: Integrated Cover equal to 40% of the LIFE FUND
Example
If you selected a LIFE FUND of R1 000 000 with the 20% Integrated Cover Option, your initial cover will amount to R1 200 000.
If you select the 20% Integrated Option, you may upgrade to the 40% Integrated Option subject to medical underwriting and Discovery's age limits.
The Cover Integrator operates in the same way as the LIFE FUND, except that the level of Integrated Cover may fluctuate on an annual basis based on your engagement in Vitality. In particular, the following features are applicable to the Cover Integrator:
• The ancillary benefits defined as a percentage of the LIFE FUND will apply to the Cover Integrator in the same percentages as they apply to the LIFE FUND. Benefit payments operate in the same way on your Cover Integrator as on your LIFE FUND as defined in Section 2.4.
• The Global Linkage Benefit, if selected, applies to your LIFE FUND but not to the Cover Integrator.
• Should you have selected any of the Integrator Plans to fund your LIFE PLAN, the initial premium reduction, annual premium review and PayBack as defined in Section 9.3, will apply to the Cover Integrator as well. Please note that the five-yearly PayBack benefit does not apply to any Buy-up Cash Conversion premiums (described in Section 8.22).
• The automatic annual premium increase and automatic annual benefit increase selected on your LIFE FUND applies to the Cover Integrator as well. The Cover Integrator is only available on LIFE PLANS which have automatic annual benefit increases. Should you cancel your automatic annual benefit increases, your Cover Integrator FUND will be removed.
• All Premium Waiver Benefits apply to the Cover Integrator.
• You may add the Cover Integrator to the non-accelerated Capital Disability and non-accelerated Severe Illness Benefits. If you have selected this option, it will be illustrated on your policy schedule. If you add Discovery's Financial Integrator together with Cover Integrator, the sum of the Financial Integrator FUND percentage and the Cover Integrator FUND percentage is limited to 60% of your LIFE FUND at inception of your policy.
• If you decrease your LIFE FUND, your Cover Integrator will be reduced proportionately.
• The Cover Integrator applies to any BenefitBooster payments (see below).
8.19 how is the cover adjusted on an annual basis?
The annual adjustments made to the Integrated Cover only, known as the Integrated Cover Adjustments, are calculated on the sum of your Integrated Cover and LIFE FUND at your policy anniversary. The adjustment depends on your Vitality status and are as follows:
vitality status for year 20% Integrated cover 40% Integrated cover
Blue -0.63% -1.07%
Bronze -0.33% -0.57%
Silver 0.00% 0.00%
Gold 0.33% 0.57%
Diamond 0.63% 1.07%
These adjustments occur until the end of the month in which you turn 65 if benefit inception is before your 56th birthday. If benefit inception is after your 56th birthday the adjustments above will cease at the end of month in which you turn 10 years older than the age you were at benefit inception.
Example
If you selected a LIFE FUND of R1 000 000 with the 20% Integrated Cover option, your initial cover will amount to R1 200 000.
Assuming you were on Bronze status in your first year, your total LIFE FUND (grown by your selected annual benefit increase in your second year) will be adjusted according to the Integrated Cover Adjustment of -0.33% (ie R 1 200 000 x -0.33% = -R 3 960).
Assuming your annual benefit increase is 6.5%, your LIFE FUND in your second year will amount to R1 065 000 (R1 000 000 + annual benefit increase) and your Integrated Cover in your second year will amount to R209 040 (R200 000 + annual benefit increase + Integrated Cover Adjustment).
The Integrated Cover Adjustments will cease at the end of the month in which the principal life assured reaches age 65 or at the end of month in which you turn the age 10 years older than the age at benefit inception, if this is later. The Integrated Cover Adjustments will not reduce the Integrated Cover below the Minimum Protected Cover Level of 20% of the initial Integrated Cover (including annual benefit escalations). Should the Integrated Cover level reach the Minimum Protected Cover Level, this level of cover can remain for whole of life, increasing by the selected annual benefit escalations.
As can be seen in the table above, policyholders at Gold and Diamond Vitality statuses may earn additional Integrated Cover. The maximum additional Integrated Cover that may be earned at these statuses is 15% of the LIFE FUND on Option 1 and 30% of the LIFE FUND on Option 2.
Should you cease to be a member of Vitality before the end of the month in which your Integrated Cover Adjustments cease you will be treated as a Blue Vitality status member thereafter.
8.20 can I Buy-up cover lost through the Integrated cover Adjustments?
You have the right to purchase additional Integrated Cover on each policy anniversary equivalent to any decrease in your Cover Integrator over the previous year, attributable to the annual Integrated Cover Adjustments.
If you choose not to take up this option in any year, you may take it up at any of the next three policy anniversaries.
You have the option to buy back any decreases in your Integrated Cover, attributable to the annual Integrated Cover Adjustments, subject to the following conditions:
• You may buy back the full Integrated Cover Adjustment within three years of the adjustment being applied.
• If you don’t use this option to buy back the full Integrated Cover Adjustment within three years of the adjustment being applied, you may use this option to buy back 50% of the adjustment on the 4th, 5th, or 6th policy anniversary after the adjustment has been applied.
• If any six-year period passes without you buying back any Integrated Cover Adjustment as described above, the right to exercise this option at any future time (in respect of any year’s Integrated Cover Adjustment) is forfeited.
• You may only buy back the Integrated Cover Adjustments at a policy anniversary.
• The ability to exercise any options and buy-back lost cover will expire at the end of the month in which your Integrated Cover Adjustments cease.
If a claim for any of the Severe Illness Benefits or Family Benefits (at Severity Levels A, B, C or D) or the Capital Disability Benefit
(at Claim Category levels A, B or D) arises, future options to increase your Integrated Cover apply to life cover only for the life to whom the claim was related. Options for other lives assured on the policy remain unchanged. Options to increase the Capital Disability Benefit will not be granted should a claim under the Capital Disability Benefit (Category C), the Income Continuation Benefit or any other disability benefit have been made within three years of the option date.
Any cover purchased through the option to buy back any cover lost through Integrated Cover Adjustments after age 56 will not be taken into account when calculating the Cover Integrator Cash Conversion (see Section 8.22).
8.21 What happens to the cover Integrator when your Integrated cover adjustments cease?
The Cover Integrator and premiums for this cover will continue for whole of life, with no additional Integrated Cover Adjustments. This is known as post-retirement Cover Integrator and will grow by the selected annual benefit escalation rate (please refer to your Policy Schedule).
8.22 cover Integrator cash conversion
If you have a Classic LIFE PLAN, your Cover Integrator FUND automatically includes the Cover Integrator Cash Conversion which is payable at the the end of the month in which your Integrated Cover Adjustments cease. This means that 5% of your Cover Integrator FUND at that point will be paid as a tax-free lump sum at the end of the month in which you turn 65 (or 10 years older than the benefit inception age, if benefit inception was after age 56 next birthday). Your cover will not reduce as a result of this payout and will stay in force for all future possible claims.
Because everyone has different needs, Discovery Life allows you to increase your Cover Integrator Cash Conversion percentage to either 25%, 50%, 75% or even 100% of your Cover Integrator FUND, provided this was done before your 56th birthday. The premium for these additional Buy-up Cash Conversion options will cease in the month the individual turns 65. This benefit is available on both Essential and Classic LIFE PLANS.
The Buy-up Cash Conversion benefit payable is guaranteed to be a minimum of 100% of your Buy-up Cash Conversion premiums if the benefit is still in force. This guarantee is in place to protect you against large claims which may significantly reduce your LIFE FUND (and hence your Cover Integrator FUND). Should you reduce your Buy-up Cash Conversion premium, your guaranteed minimum benefit will reduce proportionately.
In the case of your death before the end of the month in which your turn 65, you will receive a refund of 100% of your Buy-up Cash Conversion premiums if this benefit is still in force. Should you reduce your Buy-up Cash Conversion premium before age 65, your value on death will be reduced proportionately.
There is no surrender value for the Cover Integrator Cash Conversion. As a result, no surrender value is paid if you lapse or cancel the benefit or your Discovery LIFE PLAN before the payout date.
Please note that AccessCover or AccessCover PLUS claims that reduce your Cover Integrator FUND before the Cover Integrator Cash Conversion payout will result in a corresponding reduction of the amount that the automatic Cover Integrator Cash Conversion will pay out.
The Buy-up Cash Conversion option of 25% to 100% will not be affected.