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Educate-A-ChildFROM OLD MUTUAL GROUP ASSURANCE

Educate-A-ChildFROM OLD MUTUAL GROUP ASSURANCE

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LUMP SUM LIFE COVER WITHA FOCUS ON EDUCATION

The death of a breadwinner or other income earner can be financiallychallenging for any family, especially if that family has children who wererelying on that person to pay for their education.

Educate-A-Child from Old Mutual Group Assurance was developed as an effective and flexible solution to this education funding challenge. This valuable risk cover benefit helps reduce the financial strain of education costs on a family or child after the death of an income provider.

Figures based on findings of 2018 Old Mutual Savings and Investment Monitor research.

Old Mutual’s research shows that fewer South Africans are saving foreducation and even fewer are investing in cover to make sure theirchild gets a good education if they aren’t there to pay for it themselves.• The number of people with education policies for their children has

gone down from 35% to 25% between 2010 and 2018• More than 50% of parents are not saving towards their children’s

education at all.

Educate-A-ChildFROM OLD MUTUAL GROUP ASSURANCE

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The Educate-A-Childbenefit can be added toan employee’s Group LifeCover from Old Mutual, oroffered to employees as astandalone benefit.

On the death of an insuredperson, Educate-A-Childpays out a specified lumpsum amount that is anagreed multiple of theemployee’s salary. Unlikemost other education coverpolicies, Educate-A-Childoffers policyholders threeoptions on how the lumpsum should be paid out.These options are as follows:

NOTE: If the insured person does not nominate a beneficiary, payment into theirdeceased estate will be the default option for the full amount of cover paid out.

HOW IT WORKS • Payment into a Trust set up for funding education-related costs If this option is chosen, a separate beneficiary account will be opened for each child beneficiary (up to a maximum of six) nominated by the employee. The beneficiary and/or adult guardian can then make applications to fund various education-related costs. And if there is still capital left after a beneficiary turns 25 years old, the remaining amount will become available to him or her as a lump sum.

• Payment into an Education Development Fund Educate-A-Child also caters for those employees who would like to make a difference in the lives of disadvantaged children. If an employee doesn’t have children of their own that they need to support, they can help other deserving young people across the country to receive quality, life-changing education. In the process, they will be contributing to the positive future of the country as a whole.

• Payment into the Insured Person’s deceased estate Employees also have the option of choosing to have some, or all, of their benefit paid out into their estate when they pass away. The specified capital amount will be paid into the deceased estate as an additional death benefit and it can then be used by the beneficiaries of the estate as they please, or in line with the employee’s instructions in their will.

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6 GOOD REASONS TO OFFER EDUCATE-A-CHILD TO YOUR EMPLOYEES

Educate-A-Child can be purchased as a rider to an employee’sGroup Life Cover, or as a standalone benefit. In both instances,the cover is affordable and offers them a variety of options interms of how they want the benefit to be paid out on theirdeath. Educate-A-Child may also be purchased utilising aflexible benefit structure, where employees may independentlyadjust their benefit multiple to their specific family needs.

There are no limits on the number of gap years that a child maytake, or stipulations about the maximum number of years thata child may repeat a grade or study year before the benefitceases. A beneficiary is even allowed to take a break fromeducation and work for a few years before returning to school oruniversity, and the funding will still be available to them.

While most education insurance products only offer cover forthe employee’s biological or adopted children, Educate-A-Childhas none of these limitations. The employee can nominate anychildren to benefit from the cover – from their own children orgrandchildren, to their nieces and nephews, or even a child thatis not related to them at all. By choosing to have the benefitpaid to an Education Development Fund, they can even make abroader contribution to educating children across South Africa.

IT’S AN EFFECTIVE AND FLEXIBLE WAY FORTHEM TO PROVIDE FOR THEIR CHILDREN’SEDUCATION COSTS

IT’S LESS RESTRICTIVE THAN TRADITIONALGROUP EDUCATION PRODUCTS

IT ALLOWS EMPLOYEES TO ALSO HELPFUND THE EDUCATION OF OTHER CHILDRENIF THEY WANT TO

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Most traditional education cover products include limits forvarious types or levels of education as well as many differentrules and requirements around what they will pay for. Educate-A-Child has none of these complications or limitations. Thecapital paid into each beneficiary account can be used to paytowards a wide variety of education-related costs, including (butnot limited to) the following:

With traditional education cover plans, employees who don’t have children, or those whose children are attending low- or no- cost schools, can feel like they are not getting any real benefit for their premiums. Educate-A-Child’s design addresses this thanks to an option to have the benefit payment amount be paid into the employee’s estate when they die.

While the payment from an Educate-A-Child policy can bevery generous, the benefits of the cover extend further thanjust money. Through the Trust structure, beneficiaries andguardians who receive payments will also be able to accessextensive support, help and guidance, including roadshowswhere face-to-face assistance will be provided on all aspectsof the beneficiaries’ education plans.

IT COVERS A WIDE VARIETY OFEDUCATION-RELATED COSTS

IT IS FAIR TO ALL EMPLOYEES – EVENTHOSE WHO DON’T HAVE CHILDREN

IT’S ABOUT MUCH MORE THANA BENEFIT PAYMENT

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6• schooling or tertiary learning tuition costs (including non-traditional educational institutes like music or art academies);

• residence or accommodation expenses (including non-university residences);

• books and learning materials;• non-typical education costs like transport to a learning

institution;• costs of international education in a foreign country; and

more.

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EDUCATE-A-CHILD AT A GLANCE1 The nomination process will also require a guardian to be specified for each nominated child

COMPONENT EXPLANATION

Product structure Educate-A-Child can be offered to employees as a rider benefit linked to their Group Life Cover, or as a standalone benefit.

Cover choices Offers choice of:

• A fixed multiple of salary for all employees (capped at R20 million per individual) .

OR

• Minimum initial cover of 0.5 x Annual Salary for all employees and the option to increase the benefit as multiple of salary at defined life events (see below). Maximum

cover of 2 x Annual Salary (capped at R20 million per individual).

Employee/member minimums Minimum of 100 members/employees required on scheme.

Structure of benefit Capital benefit set as a multiple of salary.

IMPORTANT NOTE: Educate-A-Child is not an indemnity benefit. This means that itdoes not guarantee that all the education costs of beneficiaries will automatically bepaid until they complete their education. If the capital benefit amount gets used up,the funding will stop. This means that the benefit needs to be carefully managed by thebeneficiaries or their guardians and Educate-A-Child should form part of an employee’scomprehensive education savings plan.

Claim events Death only.

Number of beneficiaries Limited to a maximum of six beneficiaries.

Educate-A-ChildFROM OLD MUTUAL GROUP ASSURANCE

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COMPONENT EXPLANATION

Life events allowing forcover adjustments

• On first qualifying for compulsory insurance (new employees).• On each anniversary of the policy.• Acquiring a dependent child through birth or adoption. Will require proof of parenting, e.g. birth certificate/adoption order with Insured Person specified as parent.

Note: All events will require the completion of a Risk Benefits selection form.

Eligibility criteria • Employees (insured persons) must be under the age of 70.

Beneficiary choices

Any one, or a combination of, the following:• A Trust mandated to provide supporting payments for education costs of specified

beneficiaries.• An Educational Developmental Fund that offers financial support for education

costs for underprivileged children.• The estate of the Insured Person.

For more details about the full range of value-adding group risk benefit solutions fromOld Mutual Group Assurance go to www.oldmutual.co.za/corporate/group-assurance

To find out more about Educate-A-Child and how it allows you to help your employees protect theirchildren’s educations and futures, speak to your scheme intermediary, an Old Mutual CorporateConsultant or visit our webpage at www.oldmutual.co.za/corporate/educate-a-child. Alternatively, send an email to Old Mutual Group Assurance at gapquotes@oldmutual.com.

Old Mutual Life Assurance Company (SA) Limited is a licensed FSP and Life Insurer.OM

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