Can I take a loan against my pension policy?

No. The Government is providing a tax relief on contributions for pension policies, a tax free investment and tax free cash at retirement; it is for these reasons that funds should not be borrowed from pension policies. Pension policies can neither be surrendered, nor be used as a security at the Bank.

Are there any medical requirements?

For plans with life cover, medical examinations may be required. This will depend on the amount of life cover, your age, habits, and personal and family health history.

What is the minimum/maximum that one can apply for?

What is the minimum/maximum that one can apply for?

Do medical requirements include HIV testing?

If life cover is required the premium rates applicable to clients that submit a negative HIV anti-body test result are a fraction of those where one chooses not to go for HIV testing. In addition all ancillary benefits are available where the client has submitted a negative HIV anti-body test result. In this case, in the event that you contract AIDS later and die from it, you will be fully covered.

If you do not wish to submit HIV test results the ancillary benefits listed above are not available for selection. The maximum sum assured is then limited to 5 times one’s annual salary, or P200 000, whichever is less.

How much interest is charged on the loan?

An interest of 1.5 percent per month is charged on the loan balance.

May I cease contributions?

Provided a policy has acquired a surrender value, it may be made paid-up. In this case contributions cease and reduced benefits are enjoyed for the remainder of the policy term.

In terms of section 100 of the Insurance Industry Act of 1987, you may within 90 days of signing your proposal form, or within 30 days of receipt of your policy document, inform Botswana Life Insurance Limited of your intention to cancel the policy. In this case you may expect a full refund of premiums paid.

Should you stop paying your premiums after the policy has acquired a surrender value then you may leave your policy as a paid-up investment or you may request payment of the surrender value. If you decide to leave a policy with life cover in a paid-up state, the future cost of the life cover may gradually reduce the cash value eventually causing the policy to expire.

What is insurance?

This refers to protection against future loss in exchange of periodic payments.

Do I have to repay the loan?

Yes. There are two main reasons for repaying the loan. Firstly the long term growth of the policy is not affected and secondly the full amount of the benefit will be payable when the policy matures.

What is the initial period?

This is the period in the life of the policy where contributions in the policy are directed towards expenses and risks inherent in the policy such that no amounts are invested. The period varies according to the term of the policy.

What is MOMPATI?

MOMPATI is an effective assurance and investment programme that ensures the attainment of your individual and family financial goals.

Is it possible to know the maturity value of my policy before maturity date?

It is not possible to know the maturity value of any policy before it matures. This is so because contributions made in all the policies are invested and the value is calculated using the current unit price which fluctuates on a monthly basis.

Is there any interest charged on these encashments?

There is no interest charged on the encashment, but the value of your policy is affected by the withdrawal made in the policy. The value of the encashment is based on the number of units encashed as well as the unit price.

How Can I be sure that their needs will be catered for?

With the UNIVERSAL LIFE PROGRAMME (Mompati) long term insurance needs can be tailored to individual requirements. These may include general needs like capital build-up for children’s education, starting a business or more formal requirements such as the provision of a retirement fund, providing alternative income or lump sum in the case of a breadwinner’s premature death, serious illness or disability. Needs may also include more specialized areas like business assurance. The list is as wide as individual needs.

What is the difference between a funeral and a death benefit?

Both are death claims,but the death of a policy holder or owner who is also the insured , will result in a death claim and the closure of that policy. Whereas , covered persons will receive funeral benefits.

Do I have to repay the encashment?

Yes. Although it is not compulsory you are advised to do so, so that the long term value of your policy is not negatively affected.

What could prevent you from achieving your goals?

Permanent disability or death of the breadwinner, difficulty in following an informal saving plan, lack of investment expertise and limited options in investment portfolios. Your financial advisor or broker will assist you in the important task of assessing your immediate and long-term needs, so that the policy you take is tailored to your specific needs.

How do we claim funds remitted to the Guardian Fund?

Proceeds forwarded to the guardian fund are for minor beneficiaries and deceased persons. Upon receipt of the money, the guardian fund communicates the claiming procedure with the relatives.

Is it compulsory to apply for an encashment after my policy has accrued a surrender value?

No. Most insurance policies are long term investments; hence it is advisable to let the policy run until maturity so that one can reap the full benefits of the policy.

How flexible are these variations of MOMPATI?

Each recurring premium plan under MOMPATI must be arranged for a minimum term of 10 years. Where life cover is included, the minimum sum assured, i.e. the minimum sum guaranteed to be paid in the event of eligible death is P10 000.

The premium (the regular monthly payment) you pay is determined by you, subject to minimum premium requirements and minimum premium levels if life cover is taken. Ancillary benefits, for example, disability benefit, accidental death benefit, family funeral benefit, etc. may be added, or removed on any anniversary during the term of the policy.

An anti-inflation annual premium update facility may be incorporated in the plan and if elected, the basic death benefit may also be automatically increased. Subject to certain constraints, the premium, the sum assured, update options or ancillary benefit levels may be changed at any time.

What is the difference between life cover and pure endowment policies?

Life cover is the amount of the benefit payable on the death of the insured during the term of the policy. A pure endowment policy is a policy with no life cover: a pure investment policy.

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