A lump sum benefit is usually chosen as it provides the cheapest form of disability cover. However, an income benefit allows employees to receive an income while disabled, and therefore have some form of financial security. Trustees require sufficient knowledge of the available products to make an informed decision. Capital disability will pay a lump sum should a member be totally and permanently disabled. The benefit must have the equivalent amount of group life cover.
Statistics show that one out of every three to four claims submitted are successful.
Only one member of a fund will be paid a benefit and go on ill-health early retirement. The unsuccessful claimants would have to apply for ill-heath early retirement in the hope that the employer accepts their request. Capital disability is usually chosen, not because it is inexpensive, but it also relinquishes all responsibility that the employer has toward the claimant. The traditional PHI benefit provides a monthly benefit for claimants who are temporarily or permanently disabled. Payment will continue until the claimant recovers or retires.