If your group life cover is provided through your retirement fund, the higher premiums may have reduced the savings going into your fund.
At the recent annual Actuarial Society of South Africa convention in Cape Town, increases in group life premiums of 20% to 40% were highlighted. Many employees don’t realise they may be left disappointed at retirement because group life and contributions are bundled together, Linda Kleynscheldt, senior actuary Hollard Group Risk, says.
Thembi Mavuso, a senior specialist consultant at Mentenova Consultants and Actuaries, says you may know your employer is contributing R1 000 for you, but you may not be aware that R400 is used for group life premiums and only R600 is paid to your retirement fund. This is why you need to take note of how much your group life costs, what this means for your retirement savings and to consider what is important to you, she says.
In addition to the high claims, actuaries highlighted the uncertainty about future pandemics and how insurers need to set aside reserves for possible future spikes in claims. This also has an impact on the price your retirement fund or employer pays for group life benefits.Currently insurers are trying to manage the volatility in premiums by adjusting the benefits you are offered, so that employees can keep a valuable base level of affordable cover, Kleynscheldt says.
Employees should consider how they can reduce their risk and hence their premiums – for example, if they all get vaccinated or belong to a wellness programme, she says.
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