May I “cash-in” my policy prior to its maturity?

After the “initial period” as stipulated in the table below, provided that the policy is in force, it may be terminated for its cash value (surrendered).

Term of Policy (Years) Initial Period (Years)
10 1
11-15 2
16+ 3

However, it is never advisable to surrender a policy, especially in its early years, as this will cause you to lose money. If the policy is surrendered after only 3 years premiums have been paid, then it is unlikely that the cash value will exceed the premiums paid.

What happens when my needs change?

The flexibility of MOMPATI allows your policy to remain meaningful when your needs change. It can be changed to suit your changed circumstances.

When does the policy lapse?

This is an automatic termination of the policy by our system. The policy would lapse if it has cumulative arrears of three months and does not have surrender value. If it falls in to three months arrears and it has some value it would automatically make premium advances from the value to maintain the policy. However these advances made from the value of the policies would attract a 1.5% interest on a monthly basis until the arrears are cleared. This automatic premium advances is termed NON–FORFEITURE LOAN.

What additional benefits can I enjoy under my policy?

The following ancillary benefits can be added:

Capital Disability

To pay a lump sum if you are permanently and totally disabled as a result of injury or illness.

Dread Disease Benefit

To pay a lump sum if you suffer from one of the following diseases; heart attack, stroke, cancer, renal failure, paraplegia, blindness, chronic coronary artery disease, heart valve replacement, major organ transplant or disease of the aorta. You will also be covered in the event of a clinical diagnosis of AIDS.

Accidental Death

To pay a lump sum if you die as a direct result of bodily injury caused by violent, accidental, external and visible means within three calendar months of the accident.

Family Funeral Benefit

Provides cover for the immediate family of the insured. Cover can also be taken for any two parents. The insured and the insured’s family are covered up to the termination age. A maximum of six children may be covered.

Waiver of Premiums

This benefit waives future premiums in the event of the payor’s disability or death. Return of Premium With this benefit, on death all premiums paid to date are returned to the payor.

Extended Family Funeral Benefit

Provides cover for the extended family of the insured. Cover can be taken for any spouse, children, parents, or parents-in-law not covered by the Family Funeral Benefit (offered as an ancillary benefit by Botswana Life). Cover extends to brothers, sisters, brothers-in-law, sisters-in-law, nephews, nieces, grandparents, grandchildren, adopted children and traditional wives. The insured’s family are covered up to the date on which the insured attains the age of 65; or would have attained the age of 65, should the insured have died before then; or the date on which the policy matures, which ever occurs first.

How do I make an accurate assessment of my needs?

Let us guide you through an example.

Can my policy be re-activated?

Your policy can be re-activated or reinstated provided all the outstanding premiums have been paid and a period of more than eleven months has not passed since the lapse effective date. For Life cover policies the above condition applies as well as the client having to undergo medical tests.

Can I cede my policy?

All MOMPATI policies (excluding Retirement Annuities) can be ceded. A Financial Institution may require this when you borrow money. Ceding a policy transfers full rights to the policy value and death benefit from the owner to the cessionary.

What are your goals in life?

To own your family home, privately educate your children, start a business or a fruitful retirement.

What are the requirements of a funeral claim?

The following are required for a funeral claim:

  • Death certificate/notice of death/Letter from a local chief with three witnesses indicating that the person is dead
  • Identity of the deceased
  • Identity card of the claimant/beneficiaries
What is an encashment?

An encashment is the withdrawal of a certain percentage of the accrued value of a policy.

What plans can I choose from?

Having discussed your needs with your financial advisor or broker you should find that one of the following variations of MOMPATI is suitable:

  • Whole Life - life cover and investment until death
  • Endowment - life cover and investment for a specified term
  • Pure Endowment - investment only (no life cover) for a specified term
  • Retirement Annuity - build up of a retirement fund until retirement age
  • Single Premium - lump sum investment for any period of 5 years
  • Pure Endowment or more
  • Single Premium - lump sum pension transfer from an Retirement Annuity occupational pension scheme or voluntary contribution.
Which policies qualify for an encashment?

Tshireletso (UTSH) policies, Single premium (SPPE) policies, Educational (ULM3&ULM4) policies, and EX-BIC (BIF5, BIF7) policies.

How much do I contribute?

The level of premium depends on your needs. Where life cover is required, the minimum premium will depend on the sum assured, age, habits and occupation. The cost of an ancillary benefit will also be added where applicable. Presently, the minimum premium for any plan without life cover and ancillary benefits is P80 per month, inclusive of policy fee.

Who qualifies to be given an encashment from Botswana Life?

Anyone who has any of the above policies with Botswana Life and that policy having passed the initial period and has a surrender value. The amount that can be encashed is 60% of the surrender value of the policy.

How do I contribute?

Most clients find monthly premiums convenient. Where you opt for a monthly premium, this could be effected through a stop order facility if available or direct debit order. In this case, proof of banking details will be required. However, if you elect to make annual payments, a cash facility is available.

Which policies qualify for a loan?

Ex IGI, Ex- BIC, and all Mompati policies excluding those mentioned above for encashments.

What happens to my premiums?

Your premiums are used to purchase life insurance and ancillary benefits if applicable, and the balance is applied to purchase investment units in the MOMPATI’s Investment Fund. Other investment funds are available for specific products. Expert investment fund managers invest the available funds in the investment market, which includes the money market, capital market, equities (shares) and properties, both in Botswana and offshore.

Who qualifies for loan?

Anyone who has a policy that qualifies for a loan. This policy would have passed the initial period and acquired surrender value.

Are there any expenses?

MOMPATI should be considered as a long-term investment as the initial expenses charged are high in relation to the premiums paid in the first year. After the policy has been in force for a period of approximately five years however, the effects of the expenses reduce, and positive returns can be expected. It is for this reason that Botswana Life Insurance Limited requires a minimum term of 10 years.

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.

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