CLAIMS FACT SHEET 2014

You never know what tomorrow will bring, but you

can make sure you are prepared for the worst.

In doing this, you can protect yourself and your

family during dif cult  nancial times like illness,

disability or death.

It can be tempting not to spend your hard-earned

cash on insurance, because it’s not something

you can see or use until you have to claim – and

you may never even need to. But you can’t

predict the future and unfortunately accidents do

happen. Insurance could very well be the most

important part of your budget, as it can save you

from signi cant future  nancial losses.

You don’t know what life has in store for you so you

may need insurance because you:

1. Don’t live long enough – need life and

disability cover

2. Develop illness or injury – need sickness

and incapacity bene ts, dread disease

cover, life cover and disability cover

3. Live too long – need dread disease cover,

limited or no life cover and savings

PPS CLAIMS EXPERIENCE 2014

REALITY CHECK

UNIQUE FEATURES OF PPS

• Claims made on any PPS risk products do

not have an impact on the value of the

Pro t-Share Account

• PPS has no loadings or exclusions for

hazardous pursuits (e.g. skydiving, quad-

bike riding, etc.) or international travel

• PPS does not aggregate bene ts against

any other income or lump sum

bene ts received

• We cover you for the inability to perform

your usual professional duties and no proof

of loss of income required at claim stage

• Permanent Incapacity Booster is a rider

bene t to the Sickness and Permanent

Incapacity bene ts and it ensures that

any Permanent Incapacity award of 20%

or higher is automatically increased to a

non-reviewable 100% bene t, payable until

your chosen retirement age

• The Sickness and Permanent Incapacity

Bene t has a partial payment allowing you

to recuperate back into the workplace

STUDENT

LIFE STAGES

Footloose and fancy-free and enjoying late nights and long days. You are generally in good health, and serious matters like life insurance are not top of your mind. The lifestyle choices you make today can, however, impact your future health. The chances of a disability, especially as a result of an accident (vehicle or sporting accident), are high.

The bene ts of buying life insurance when you are younger are that you get a cheaper premium because at this age you are generally healthier.

YOUNG PROFESSIONAL (UNDER 35)

You may still enjoy good health, but conditions like stress (from work pressures, family responsibility, and pregnancy), if not managed early on, may take their toll on you. The chances of developing high cholesterol and blood pressure also increases.

ESTABLISHED PROFESSIONAL (35+)

The risk of developing cancer increases in your forties. Other common risks for this age group are heart disease, stroke and diabetes. Weight gain at this age (commonly referred to as the “mid-life spread”) is common, and has associated risks like arthritis, certain cancers, asthma, etc.

As you get older, and you start having health problems, your insurance premiums may be loaded or certain conditions may be excluded.

PRE-RETIREMENT (55+)

RETIREMENT (65+)

At this age, people have a high risk of developing heart disease, hypertension and stroke. The risk for breast cancer in females and prostate cancer in males increases signi cantly. Osteoarthritis and osteoporosis become more common in this age group.

Your insurability decreases as your health gets worse, and your premium may either be loaded, bene ts excluded, or your whole application declined.

As you get older you may develop more disabling conditions. The most common and prevalent conditions in this age group are arthritis, hypertension, Alzheimer’s, Dementia and cataracts. This age group is also more likely to have more frequent doctor visits and longer hospital stays.

R11. 2 BILLION

*

*all bene ts including exits

SHARE IN COMPANY

PROFITS OVER PREVIOUS

10 YEARS:

R21.6 BILLION

BENEFITS PAID IN THE LAST 10 YEARS:

PPS EXISTS TO PAY CLAIMS

REASONS PPS EXISTS:

SUMMARY OF CLAIMS PAID IN 2014

TOTAL BENEFITS PAID OVER 10 YEARS.

MILLION RAND

R185 MILLION PAID

IN CANCER

CLAIMS

ALONE, ACROSS ALL BENEFITS

IN 2014 WE PAID

R1 065 722 548

IN CLAIMS

FOR SICKNESS AND PERMANENT

INCAPACITY BENEFITS.

MORE THAN 19 000

CLAIMS PROCESSED

AVERAGE PAID PER WORKING DAY

R4 262 890

DREAD DISEASE

R58 540 000

SICKNESS

R374 646 991

LIFE COVER

R321 905 589

PERMANENT INCAPACITY

R255 047 557

LUMP SUM DISABILITY

R55 582 411

35.2%

24%

30%

5.5%

5.2%

TOTAL PAID R374 646 991 IN 2014

SICKNESS

DIGESTIVE SYSTEM DISORDERS MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE DISORDERS

RESPIRATORY SYSTEM DISEASES INJURIES

HEART AND BLOOD VESSEL DISORDERS

27%

21%

18%

16%

9%

CONDITIONS MOST CLAIMED FOR

OTHER*

MEDICAL & DENTAL

LEGAL

FINANCIAL & ACCOUNTING

ENGINEERING

51%

13%

12%

7%

6%

SPREAD OF CLAIMS BY PROFESSION

*Other includes professions like architects, quantity surveyors, etc.

ACTUAL CLAIM EXAMPLE:

A 43-year-old engineer suffered a brain injury related to a sky-diving accident. The member was hospitalised for 17 days and then went to a rehabilitation centre for 69 days. The member was paid both the sickness and hospital bene ts for this total period (86 days). The member has returned to work on a part-time basis and continues to receive a monthly partial payment.

DID YOU KNOW?

As people age, their joints are affected by changes in cartilage and in connective tissue. The cartilage inside a joint becomes thinner, and components of the cartilage become altered, which may make the joint less resilient and more susceptible to damage and injury. (World Health Organisation)

Be sure to take out your insurance before the risk for diseases or disorders become more common. As you can see, you are more likely to need to

claim above the age of 35.

CLAIMS BY AGE

>65 YEARS 6.9% <35 YEARS 9.9% 35-44 YEARS 23.4% 45-54 YEARS 27.5% 55-65 YEARS 32.5%

PERMANENT INCAPACITY

12% of PI claims received a 20% award 19% of PI claims received a 60% award 69% of PI claims received a 100% award

ACTUAL CLAIM EXAMPLE:

A 61-year-old quantity surveyor suffered a fall which resulted in a fracture dislocation of her ankle. She also developed a sepsis in the ankle and osteoarthritis of the knees. As a result, she has poor balance, the inability to walk over uneven surfaces and negotiate stairs, dif culty with standing and walking for long periods of time and reduced muscle strength and range of movement in the right ankle. The physical and functional requirements of her job require intact mobility and agility and the ability to negotiate uneven terrain, and stand and walk for long periods of time. In view of the injuries suffered she is no longer able to do this. She was awarded 100% Permanent Incapacity bene t.

CANCER

PSYCHIATRIC DISORDERS

& MENTAL/BEHAVIOURAL DISORDERS

CEREBROVASCULAR/STROKE INJURIES NEUROLOGICAL DISEASES

43%

24%

12%

12%

8%

CONDITIONS MOST CLAIMED FOR

OTHER*

MEDICAL & DENTAL

FINANCIAL & ACCOUNTING LEGAL ENGINEERING

49%

14%

14%

9%

5%

SPREAD OF CLAIMS BY PROFESSION

*Other includes professions like architects, lecturers etc.

PERMANENT INCAPACITY CLAIMS

89% OF CLAIMS PAID AT 100%

DID NOT HAVE THE PERMANENT INCAPACITY BOOSTER

TOTAL PAID R255 047 557 IN 2014

DID YOU KNOW?

The Permanent Incapacity Booster (previously known as Occupation Speci c Rider Bene t) is a rider bene t that increases any Permanent Incapacity (PI) award to a 100% bene t. Once the bene t is awarded it is never reviewed and any income earned is not offset against it.

CLAIMS BY AGE

>65 YEARS 11.3% <35 YEARS 0.5% 35-44 YEARS 10.2% 45-54 YEARS 27.8% 55-65 YEARS 52.9%

PROFESSIONAL LIFE PROVIDER

Pro t-Share Accounts paid on death:

R52 518 000

Terminal Illness Bene ts paid:

R12 199 524

Business Assurance life cover:

R8.6 million

(may be used to buy out the partner or settle any business debts, buy out your share, etc.)

Highest life cover claim paid:

R12.9 million

ACTUAL CLAIM EXAMPLE:

A 47-year-old pharmacist had cover with PPS since 2011. He suffered a heart attack while alone at home in June 2014, and passed away. A life cover bene t R10 180 546 was paid to his estate.

TOTAL PAID R321 905 589 IN 2014

MOTOR VEHICLE ACCIDENT & DROWNING CANCER

OLD AGE/NATURAL CARDIOVASCULAR

MURDER & SUICIDE

30%

18%

17%

12%

6%

CONDITIONS MOST CLAIMED FOR

ENGINEERING MEDICAL & DENTAL

OTHER* LEGAL PHARMACIST

32%

18%

14%

9%

6%

SPREAD OF CLAIMS BY PROFESSION

*Other includes professions like architects, quantity surveyors, etc.

DID YOU KNOW?

Provide for your family in the event of you dying too soon. As a rule of thumb, life cover should be your current annual income x 10 PLUS debt*. E.g. if you earn R500 000 per annum and have debt (bond, car etc.) of R2 000 000 then your life cover amount should be R500 000 x 10 + R2 000 000 = R7 000 000. This will assist in protecting your family  nancially. Speak to a  nancial advisor for a  nancial need analysis. *Illustrative.

>65 YEARS 32.3% <35 YEARS 3.9% 35-44 YEARS 14.2% 45-54 YEARS 22.9% 55-65 YEARS 26.7%

PROFESSIONAL HEALTH PROVIDER

(CRITICAL ILLNESS, TRAUMA AND PHYSICAL IMPAIRMENT)

ACTUAL CLAIM EXAMPLE

A 53-year-old female dentist was having lunch with her family in July 2014 when she lost consciousness and was admitted to ICU. She had suffered a cardiac arrest. She was without oxygen for a prolonged period of time and is in a persistent vegetative state, and has not regained consciousness. She was paid her full bene t of R527 200.

TOTAL PAID R58 540 000

IN 2014

NERVOUS SYSTEM DISEASES CANCER & NEOPLASMS

CEREBROVASCULAR/STROKE

CIRCULATORY & CARDIOVASCULAR SYSTEM

INCLUDING CORONARY ARTERY BYPASS GRAFT (CABG)

69%

18%

6.5%

6%

CONDITIONS MOST CLAIMED FOR

LEGAL

MEDICAL & DENTAL

PHARMACIST FINANCIAL/ACCOUNTING ENGINEERING

29%

24%

13%

13%

10%

SPREAD OF CLAIMS BY OCCUPATION

DID YOU KNOW?

We each have a one-in-four chance of contracting cancer in our lifetime and up to 90% of these cancers are caused by environmental factors. Statistics from the Heart & Stroke Foundation show that 33% of men and 25% of women will have a heart condition by the age of 60.

This illustrates that the conditions most claimed for are from the so-called BIG FOUR Illness: Heart attack, Cancer, Stroke, Coronary Artery Bypass Graft (CABG).

SPREAD OF CLAIMS BY AGE

•

AVERAGE AGE 51

CLAIMS BY SEVERITY LEVEL:

* Includes Core 100. This bene t pays 100% of the insured amount, irrespective of the severity level for heart attacks, cardiac surgery

and procedures, stroke and cancer. AWARD % CLAIMS PAID A 67%* B 7% C 17% D 9%

>65 YEARS 32.3% <35 YEARS 3.9% 35-44 YEARS 14.2% 45-54 YEARS 22.9% 55-65 YEARS 26.7%

PROFESSIONAL DISABILITY PROVIDER

TOTAL PAID R55 582 411 IN 2014

38%

31%

10%

7%

7%

CONDITIONS MOST CLAIMED FOR

PHARMACISTS MEDICAL LEGAL ENGINEERING FINANCIAL/ACCOUNTING

47%

17%

14%

13%

7%

SPREAD OF CLAIMS BY PROFESSION

DID YOU KNOW?

Insurance statistics show that only nine percent of long-term disabilities actually resulted from serious accidents. The top causes of disability are often triggered by more common, chronic conditions. One out of four caused by muscle and bone disorders like back problems, joint pain and muscle pain. (Research by LIMRA).

CLAIM EXAMPLE:

A 62-year-old male doctor in private practice was diagnosed with chronic obstructive

pulmonary/airway disease. His effort tolerance is severely limited due to shortness

of breath and he is unable to perform his duties as a doctor. A lump sum disability of

R504 500 was paid to him.

In uence on

performance and careers Age distribution comparison Before 40 (%) After 40 (%) Slight in uence on

performance

65.8 34.2 Signi cant in uence on

performance

75.0 25.0 Early retirement 41.7 58.3

Functionally unemployable 42.1 57.9

EFFECTS OF MOTOR VEHICLE

ACCIDENTS ON CAREERS AND WORK

PERFORMANCE OF VICTIMS:

Source www.sajip.co.za

HIGHEST DISABILITY CLAIM PAID: R 6 447 629

<35 YEARS 3.3% 35-44 YEARS 26.6% 45-54 YEARS 20% 55-65 YEARS 50%

THE YOUNG MEMBER

(STUDENTS AND UNDER 35’

)

TOTAL CLAIMS PAID FOR MEMBERS UNDER 35 IN 2014

PERMANENT INCAPACITY CLAIM EXAMPLE:

AGE 33 • GENDER Male • PROFESSION Physiotherapist (in private practice) • CLAIM EVENT Member was

involved in a bicycle accident and sustained a head injury. He underwent extensive rehabilitation and still presents with cognitive problems which prevent him from practising as a physiotherapist. He was awarded a 100% Permanent Incapacity bene t, and will receive a monthly income until he is 66 years.

PROFESSIONAL HEALTH PROVIDER CLAIM:

AGE 29 • GENDER Male • OCCUPATION Accountant • CLAIM EVENT Member started feeling unwell,

experiencing numbness in his hands and sudden problems with speech, and had an epileptic  t. An MRI showed that the member had a stage-2 brain tumor, which was removed. The member had a Core 100%

bene t, and was paid the full bene t amount. • _{AMOUNT PAID R686 500.}

CLAIMS EXAMPLES FOR YOUNG MEMBERS

RESPIRATORY SYSTEM DISEASES DIGESTIVE SYSTEM DIESEASES INJURIES

38%

36%

26%

TOP SICKNESS CLAIMS FOR

UNDER 35’

S

:

MOTOR VECHILE ACCIDENTS SUICIDE

INJURIES

50%

25%

25%

PROFESSIONAL LIFE PROVIDER

(LIFE COVER)

PROFESSIONAL LIFE PROVIDER CLAIM EXAMPLE:

AGE 23 • GENDER Male • PROFESSION Attorney • CLAIM EVENT Member took out PPS life cover in January

2014. On 25 May 2014, the member’s vehicle was stationary, parked on the side of the road. Another vehicle

hit him from the back and the member sustained head injuries and passed away. • AMOUNT PAID R1 000 000.

LIFE COVER R13.5 MILLION

SICKNESS R15.8 MILLION

www.pps.co.za

The Professional Provident Society Holdings Trust No IT 312/2011. PPS Insurance Company Limited Reg. No. 2001/017730/06 (PPS Insurance) - Licence No. 1044. Please note: all information and opinions provided are of a general nature and are not intended to address the circumstances of any Financial Service Provider’s (FSP) clients. We are not acting and do not purport to act in any way as an adviser or in a  duciary capacity. Any representation or opinion is provided for information purposes only. The information provided in this document is subject to the terms and conditions applicable to any policy issued by PPS Insurance and its subsidiaries. In terms of the Financial Advisory and Intermediary Services Act, FSP’s should not provide advice to investors without appropriate risk analysis and after a thorough examination of a particular client’s  nancial situation. We endeavor to provide accurate and timely information but we make no representation or warranty, express or implied, with respect to the correctness, accuracy or completeness of the information and opinions. We do not undertake to update, modify or amend the information on a frequent basis or to advise any person if such information subsequently becomes inaccurate. PPS Insurance will not be held liable or responsible for any direct or consequential loss or damage suffered by any party as a result of that party acting on the basis of the information provided in any of these guides. © 2015 PPS. VERSION 1/2015

CLAIMS CAN BE SUBMITTED AS FOLLOWS

Online via PPS InTouch (www.pps.co.za) • Claims department ([email protected])

Permanent Incapacity and Professional Disability Provider bene t can be submitted via: [email protected]

ENQUIRIES CAN BE MADE AT