What is the difference between group cover and my own policy?

Group cover comes with your job: your employer owns the scheme, there are usually no medical tests, and it ends the day you leave. A personal policy is yours — it follows you between jobs, but is underwritten on your health and usually costs more per rand of cover.

What happens to my group life cover when I resign?

It usually stops immediately. Some schemes offer a "continuation option" — converting to a personal policy within 60 days without medical tests. If your health has changed since you were hired, that option can be very valuable. Ask HR before your last day.

Do I need gap cover if I have a good medical aid?

Gap cover exists because specialists can charge 300-500% of medical scheme rates, and even top plans often pay only 100-200%. It is a cheap add-on (typically under R500/month for a family) that covers that in-hospital shortfall. Whether you need it depends on your plan’s payment rate — check your scheme’s "rate of reimbursement".

Is a payout from group life or disability cover taxed?

Group life and lump-sum disability payouts from an unapproved scheme (premiums taxed as a fringe benefit) are generally tax-free; payouts via the retirement fund (approved cover) are taxed on the retirement lump-sum tables. Income protection payouts have been tax-free since 2015 because premiums are no longer deductible. Your benefits booklet says which type you have.

Where do I find what I’m actually covered for?

Ask HR or your fund administrator for the "member benefit statement" — it lists your life multiple, disability benefit, and beneficiaries. For medical aid and gap cover, the scheme’s benefit brochure lists payment rates and exclusions. If you can’t decode a clause, a registered adviser can — this page is education, not advice.

Policy decoder

Your employee benefits booklet, translated. Pick a cover type to see what it actually pays, when it pays, and the clauses worth checking before you need them.

Your gross monthly salary

Used for the payout examples below

What it is

A lump sum paid to your beneficiaries if you die while employed. Most employers express it as a multiple of annual salary — commonly 2x to 4x. You're usually covered automatically, no medical tests, and the premium often appears on your payslip as "group life" or sits inside your retirement fund contribution.

Example: what would it pay?

Cover multiple (check your benefit statement)

Your beneficiaries would receive about

R 900 000

Check these clauses

Beneficiary nomination. If it's unapproved cover, the insurer pays who you nominated — an outdated form pays an ex. If it's approved (via the fund), trustees decide based on dependency, and nomination is only a guide.
It ends when you leave. Resign and the cover stops — ask about a continuation option if your health has changed.
Approved vs unapproved. Determines both the tax on the payout and who decides where the money goes. Your benefits booklet states which.

Educational only — not financial advice

FirstCheque gives general information and estimates based on published SARS tables. It doesn't know your full situation and isn't advice under the FAIS Act. Confirm figures with SARS, your payroll department, or a registered financial adviser.

Policy decoder

Common questions