Know Your Money with Bronwyn Waner and Craig Finch
Know Your Money with Bronwyn Waner and Craig Finch
143. Insurance for Everyone: Unlocking Bidvest Life Event-Based Cover
What happens when traditional insurance systems fail those who need protection most? Melody from Bidvest joins us to explore their groundbreaking event-based cover - a revolutionary approach providing income protection to previously uninsurable South Africans.
The journey began in 2015 when Bidvest identified approximately 250 occupations systematically denied income protection. Whether due to high occupational risk (like professional athletes) or sensitivity to claims (like performers whose careers can be derailed by minor health issues), these individuals were left vulnerable without adequate financial protection. Believing every hardworking South African deserves income security, Bidvest created a solution based on 209 specific claimable events rather than traditional disability definitions.
The beauty of event-based cover lies in its flexibility. A homemaker, whose financial value to a family can reach R50,000 monthly, qualifies for all 209 events with coverage linked to the breadwinner's income. Meanwhile, a rugby player might access 138 events with alternative pathways for excluded injuries - as demonstrated by a Stormers player who received 129 days of benefits after ACL surgery despite specific exclusions. Most remarkably, Bidvest has extended this protection to those with variable incomes from multiple sources and even individuals with bipolar mood disorder who face universal rejection elsewhere in the industry.
This episode reveals how innovative thinking can transform financial protection for South Africans who've fallen through traditional insurance cracks. Whether you're in a high-risk profession, have an unpredictable income stream, or manage a health condition that's previously left you uninsurable, Bidvest's event-based cover might be the solution you've been seeking. Listen now to discover if you qualify for this game-changing approach to income protection.
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Hello everybody, welcome to Know your Money. I'm Bronwyn Wehner.
Speaker 2:And I'm Craig Finch, and we are from Growth Financial Planning. We hope you enjoy our podcast.
Speaker 1:Hello everybody. We have Melody from BitidVest here for the last of our BidVest series and one of the topics we're going to discuss today is event-based cover. So this is specific. Events like housewives are generally not covered, or sometimes students or sports people, and BidVest has come up with a way of actually helping insure those people, insuring those people. So thank you for being here, melody, thank you for the whole series, for having me again.
Speaker 3:I've really been enjoying having this discussion with you guys.
Speaker 3:Event-based cover is a really exciting topic to discuss because this is something that really sets us apart from the rest of the industry. We did a bit of a study in 2015 from an underwriting perspective. We've been doing income protection for 20 years. At that stage, we've underwritten a whole lot of people, and so the question was asked from an underwriting perspective who's not getting cover and why aren't they getting cover? And what we found at that stage is there were about 250 different occupations where we weren't giving the in cover, and what we found at that stage is there were about 250 different occupations where we weren't giving the people cover. The two reasons why they weren't getting cover is either because the job they perform is very high risk, so there's a very high chance of them getting injured on the job, and so most insurers look at those people and go, oh no, we don't want to because there's too high a risk of them dipping into the risk pool.
Speaker 3:The second group of people is people. The job itself is not high risk, but they're very sensitive to claim, so the slightest thing that happens to them potentially means they can't do their job for a long period of time or, quite often can't do their job, meaning they're going to be in claim quite often, and so they don't get cover. An example of that would be, let's say, a singer. It's not particularly risky being a singer, but if I'm singing many hours a day and I'm doing concerts and all of that, I can get laryngitis. Laryngitis is not particularly serious, but if I've got laryngitis, I've got bronchitis, flu, anything like that. Obviously I can't do my job and so I am occupationally disabled, but I could potentially have laryngitis every single month, you know. So the chance of that person claiming on their policy is incredibly high and insurance companies go that's a little bit too much of a risk for us, so they don't get covered.
Speaker 3:So, having this list of people, we thought well, what does the rest of the industry do and how can we fix this? Because we really do believe that every hardworking South African should be able to protect their income, because at the end of the day, we all have exactly the same need, and that's to put food on the table for our families. So we looked in the industry and what we found was most of those occupations would only get functional impairment cover. That meant the client had to be permanently functionally impaired in order to get cover. So I can never use my arm again, I've completely lost my leg, I've completely lost my sight or that sort of thing.
Speaker 3:For those who were lucky enough to get a temporary income benefit, it typically came with a really long waiting period of three to six months, and we spoke in the previous episode about the risks of having such a long waiting period. Although it is more affordable, it essentially means that you can't claim for the most common things that people would claim for. So, knowing that, we thought, okay, if that's the big problem, they can't get cover because they're high risk, they're sensitive to claim and the cover they're getting in the industry, in the market, is like really not actually doing anything for them. How can we fix that? And that's where we came up with our event-based cover.
Speaker 3:Now, in a previous episode, I spoke to you about our fast track events, where I said we looked at all the claims we'd ever paid and we actually started that study specifically with event-based cover in mind. You know what solution can we come up with? So we found that there are these 209 things that people claim for year in and year out. They're very common, and so from that concept, event-based cover was born and, although our fast track events apply to our comprehensive clients and our event-based cover, it really was created for the event-based client, and so essentially what it says is where all other income protection benefits require a client to be occupationally disabled in order to claim event-based cover. Says here's a specific list of events that you qualify for for your specific job, taking into consideration the risks involved with your job, and all you need to do is prove that one of these events have happened to you. So, like I mentioned earlier on, that can be an x-ray, it can be a sick note from a doctor, could be a surgical report, can you?
Speaker 1:do a practical example of like a housewife now.
Speaker 3:Okay, so we can look at a housewife. So, like we said earlier on, with a student as well, it seems counterintuitive to give income protection to someone who's not earning an income. But there was an article written a number of years ago that asked the question what would the financial impact be on a family if the homemaker wasn't there for whatever reason? And it can be as much as 50,000 Rand a month, because now it's transport for the kids to school and aftercare and someone to clean the house and do the cooking and all that sort of stuff. So very important to protect that homemaker.
Speaker 3:Yeah, so when you want an example, are you wanting specific days and amounts?
Speaker 1:So just like, for example, that you were saying there's a list that a housewife needs to, you know, would they be covered for everything? So yeah.
Speaker 3:So a housewife is an example. Obviously, there's not a big risk in being a housewife, so the housewife is an example of an occupation that would qualify for the full list of 209 events. That would qualify for the full list of 209 events. So if she falls down the stairs and breaks her leg, goes to the hospital, has an x-ray, puts it on a cast, she sends us her claim form with that x-ray and we will pay her for a certain amount of days depending on the specific event. An example would be if she's gone, say, for an ACL reconstruction she fell down the stairs and she tore her ACL and she goes for ACL reconstruction she would get a payout guaranteed for 60 days at 100% of whatever her cover amount was.
Speaker 1:And then, is that capped? Is the housewife capped at a certain amount?
Speaker 3:The housewife's cover is based on what the breadwinner's income is and that's capped at 50,000 Rand, is the maximum they can be covered for.
Speaker 2:And this is for income protection.
Speaker 3:Income protection. So, that housewife can have temporary income cover, extended income cover, critical illness income that we've spoken about. She can go and add the future cover protector to all of those. She can have lump sum, critical illness, disability, life cover, life income.
Speaker 1:It's a full suite of benefits because that housewife can have housewives feel, or even house husbands. They feel as though they don't earn anything because they're not getting that salary. But, like you've just said, they are absolutely what they are doing costs a lot of other things, and it's not fair that they're not always covered, so it's one of the best things.
Speaker 3:Yeah, because I mean, what are the choices If that homemaker's not there to take kids to school, do the washing, do the food, whatever it's, either the breadwinner has to come home and that's going to have a financial impact because now they're not earning a salary or they're on unpaid leave, or whatever that might be, or they have to fork out money to other people to do that job. So absolutely there's a need for that homemaker to be covered. But along with that you've got people who work in occupations that are very high risk where the chance of them getting injured.
Speaker 1:Can you give an?
Speaker 3:example of one of those.
Speaker 4:A machinist.
Speaker 3:Being South African, and we all love, love rugby. Let's use a rugby player as an example. We've got quite a number of rugby players on our books. Now no other insurer will give them temporary income protection because we know the moment that they step on that field there's a chance that they're going to break something, tear something, concuss, whatever the case may be. So most insurers look at that and go that's too much of a risk, we don't want to touch you. But it's not just rugby injuries that they're at risk at.
Speaker 3:There are tons of other things that could happen to them. They could also get cancer. They can also have the appendix taken out. They can also get COVID. They can be in a car accident. So by saying I'm not giving you cover because your occupation is risky, you're excluding them from hundreds of other things that could potentially happen to them. So we give a rugby player event-based cover. They're covered for temporary income for two years. They've got extended income benefits up until retirement age and again, like I said in a previous episode, we don't require them to be permanently disabled in order to to claim they have critical they can have critical illness, income, lump sums, life cover the whole suite of benefits.
Speaker 3:The only difference between that rugby player and the homemaker is the amount of the events that they qualify for. So that broken leg down the stairs thing Would have been different for them. So the homemaker has got the 209 events. She's had ACL reconstruction. She gets 60 days guaranteed at 100% of cover. The rugby player, on the other hand, we know he's at risk of injuring a knee at some point, so his list of events looks slightly different. He's only got access to 138 events instead of 209 because we've excluded certain events that we know he's specifically at risk for. But that being said, just because that event's been removed doesn't mean there's no claim. Just means we're going to look at the claim through a slightly different lens. So I'll give you a real example. We have a client on our books who used to play for the Stormers and his cover started on the Friday. The very next day he went on the field and he injured his ACL. What's his name?
Speaker 4:I'll tell you later, okay.
Speaker 3:Yeah, he injured his ACL. He had to go for ACL reconstruction. Now, on his specific list of events, if you go and look there, you won't find ACL reconstruction because it's been excluded because he's at high risk. The homemaker got 60 days. He's at high risk. The homemaker got 60 days. On his list. However, there's a little catch-all definition that says you know surgical procedures not elsewhere defined on your list. Did he go for surgery? Yes, he did. So we paid him 100% of his cover amount for 14 days purely because he went for surgery. Then thereafter we assess the claim based on temporary impairment and again we've got a defined list of impairments hospitalization, mobility, loss of use of limb, vision, hearing, all sorts of things. So for him specifically, once he came out of hospital, he had to be on crutches. For oh, I can't remember, it was quite a few months that he had to be on crutches for, oh, I can't remember Like six months.
Speaker 3:Yeah, it was quite a few months that he had to be on crutches. So there we paid him a portion of his income for as long as he was on crutches. When he came off the crutches he couldn't just run straight onto the field, he had to go for rehab, have physio. So for as long as he was in physio we paid him a portion of his income for that duration. So in total I think we paid him for something like 129 days. Where else were in the industry he would not have had?
Speaker 2:cover at all.
Speaker 3:Any cover at all, any cover at all, should something else happen to him, like having his tonsils taken out, or he gets cancer or whatever he still has the cover for all of those things, because that's got nothing to do with the fact that he's a rugby player.
Speaker 2:I think a big market for you to look at is based on how well the Springboks are playing against opposition. You should start insuring the opposition, because they need it.
Speaker 3:That's not a bad idea, does this?
Speaker 2:cover all sports. Tennis coaches golf coaches, paddle all that yeah, we've got… Because traditionally you couldn't cover those people.
Speaker 3:Yeah, coaches, paddle, all that, yeah, we've got. Because traditionally you couldn't cover those people, yeah, and the reason you couldn't cover them is obviously because of the risk of getting injury or because of there's a third type of person. So there's the high risk, there's the ones that are sensitive to claim, and then you've got people who've got a very variable income. So the income I get is very different from month to month. And again insurers look at that and go it's too much of a risk. We don't know if you're going to pay your premiums, if you don't know where your next paycheck comes from, you might accidentally fall down the stairs so that you can claim. So that's a bit of a risk, and so those types of occupations we also stick into Can you give an example, so it's just just easier.
Speaker 3:So an example in my past life, before I was a financial advisor, I used to work in the theatre industry with actors and singers and dancers, that sort of thing. I had no full-time work. I was a lecturer for part of the day and then I was a sports coach for the afternoons and then in the evenings I worked at the theatre on a show that was running for two weeks. Next month there might not be a show, so it just depended on what I was doing, but I typically had income coming from three, four, five, six different sources month to month, but my income did this, and so no insurance company would have given me cover. I couldn't get vehicle finance, I couldn't get a home loan, but now BizVest will cover that. So, yes, someone who has a fluctuating income, even though they have an occupation that's not necessarily high risk, it could be someone with a low risk occupation but because of the nature of how they're working and that variable income, we could put them on event-based cover where another insurer might not offer them cover at all.
Speaker 4:Sorry. So let's say you have a housewife and she plays rugby on the weekends as a hobby.
Speaker 3:That's a hobby, so how?
Speaker 4:does that work?
Speaker 3:Hobbies? We don't, unless it's a hobby, like you are jumping out of an airplane or you're doing deep sea diving or motocross those sorts of hobbies you'll have an exclusion on your policy, and that's even on normal policies, on normal policies, yeah. So across the board.
Speaker 1:that's industry standard you have a hazardous pursuit, yeah, but that's not I mean.
Speaker 4:So she plays rugby on the weekends. That's not extreme.
Speaker 3:So that's not a specific thing that we would exclude. So that's not extreme If she gets injured. Because I mean, soccer players can get easily injured, yeah, but she's a skydiver If she's a skydiver and she gets hurt while she's skydiving, then we're not going to pay for the camp because that's a hazardous pursuit If she gets hurt while skydiving.
Speaker 4:She's probably not around, is she?
Speaker 1:Well, you know, I'll look at Colvin, you don't know.
Speaker 4:Most cases, I don't know Still in the sky, dropping from 10,000 feet.
Speaker 2:I think most insurers will cover skydiving in death but not disability.
Speaker 3:Yeah, yeah. So the question is what happens if you survive? So yeah, so event-based cover was designed for those people who couldn't get cover, because of the nature of their occupation and because there was nothing else in the industry for them.
Speaker 3:So we wanted to make sure that they're taken care of. But we've done it in a way where we as the insurer are also protected. Um, and we've now been able to to pivot that product and now also start using it for people who don't get covered because of their health. So we now offer our event-based cover to clients who suffer from bipolar mood disorder. You'll know in the industry anyone who's bipolar no cover at all. If you've got depression or anxiety, you can get cover, but with a psychological exclusion Bipolar, no, you don't get cover. With us we are able to put them on event-based cover. They'll have one or two I think there's five events that are excluded from the list of 209, and that's got to do with being in a mental health facility or cognitive impairment, that sort of thing. But outside of that they covered for everything else that could potentially happen to them in life and I think that's quite unique to us in the market Awesome.
Speaker 1:Thank you so much.
Speaker 2:That's amazing news. Thank you so much.
Speaker 3:Thank you so much for having me Thank you for your time. I hope your viewers and your listeners have learned something.
Speaker 2:I'm sure we have, we've really, really enjoyed this.
Speaker 3:Thank you, thanks so much.
Speaker 2:Thank you, cheers. Thank you for listening. If you have enjoyed this podcast and would like to subscribe, please visit our website, wwwgrowthfpcoza. The information we have provided in this podcast is our personal opinion. For more detailed information, please discuss your financial situation with a financial planner.