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.

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.

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