The Professional Edition 4 October 2021 | Page 12

PPS DECLARED ANNUAL BENEFIT ADJUSTMENT
POLICY START DATE : STARTING SUM ASSURED :
1 JANUARY 2010 R2 000 000
THIS EXAMPLE SHOWS THE DIFFERENCE IN THE VALUE OF BENEFITS BETWEEN TWO MEMBERS .
BENEFIT AMOUNT WITH ANNUAL BENEFIT INCREASE
BENEFIT AMOUNT WITHOUT ANNUAL BENEFIT INCREASE
2010
R2 000 000
2010
R2 000 000
2011
R2 158 000
2011
R2 000 000
2012
R2 328 482
2012
R2 000 000
2013
R2 528 731
2013
R2 000 000
2014
R2 746 202
2014
R2 000 000
2015
2016
R2 982 376
R3 232 895
Kholwa ' s policy started on 1 January 2010 with the sum assured at R2 000 000 .
2015
2016
R2 000 000
R2 000 000
Jeremy ' s policy started at the same time , with the same sum assured .
2017
2018
2019
R3 504 459
R3 767 293
R4 049 840
She had a benefit increase on her policy every year , meaning that the effects of inflation were mitigated .
2017
2018
2019
R2 000 000
R2 000 000
R2 000 000
However , his policy had no annual benefit increases , meaning that the value of his cover stayed the same over the years .
2020
R 4 333 329
2020
R2 000 000
ASSUMPTIONS & COMMENTS :
• Kholwa had all annual benefit increases from the start date of the policy ;
• The latest average headline inflation rates as published by StatsSA were used ;
• The real value includes the effects of inflation , and increases by 31 % with all annual benefit increases applied to the starting benefit amount .
VALUE OF BENEFITS OVER TIME
5000 000 4500 000 4000 000
BENEFIT AMOUNT
3500 000 3000 000 2500 000 2000 000 1500 000 1000 000 500 000
- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2020
KHOLWA
JEREMY
PPS is a licensed Insurer and authorised FSP
12