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Life Assurance
Monday, March 1, 1999
Clearer purpose

The new Long-term Insurance Act has eliminated the last vestiges of in-equality between men and women who are married in community of property, notes Sanlam. Policies owned individually (excluding fund member policies such as retirement annuities) will in future be included in the joint estate and both parties will have a say regarding them.
According to James Nelson, a Legal adviser at Sanlam Personal Finance, the Act, which came into effect on 1st January this year, has finally eliminated an anomaly created by the previous Act in terms of which a woman’s policy did not form part oi a couple’s joint estate.
“When the legislator removed men’s marital power over their wives and gave both equal say regarding their joint estate, the clause in the previous Insurance Act was ‘overlooked’. As a result, although both parties had to agree to bind their joint estate, which included the husband’s policies, the husband had no say regarding his wife’s policies and she could do with them as she pleased,” he explains.
“As far as their policies were concerned, such women therefore had their own little private estate. But all the assets of both parties married in community of property, now fall into a joint estate over which they have equal say.”
According to Mr Nelson, the new Act should be welcomed because its main purpose is to protect policyholders. “Sanlam Personal Finance is pleased about this and is also very excited about the possibilities the new Act provides to offer clients more modern and needs-oriented products. This has been made possible by the fact that life assurance is no longer required when benefits are provided for major medical and hospital expenses, trauma and disability, amongst others. Although clients’ existing policy contracts will not be affected by this, it creates the opportunity to offer the client new products”
Other new elements contained in the Act include:
A receipt must be issued on the spot for all cash premium payments. If a policy is taken out or an alteration is made to an existing one, the policyholder must he provided with a summary of the key elements of the policy contract within 60 days or less.
The Act now allows even an unborn child to be insured. A minor aged 18 or older can now decide for him- self to surrender, pledge or cede his policy. Policy contracts will not he declared null and void summarily on the basis of misrepresentation if the misrepresentation did not have a material influence on the risk.

Copyright © Insurance Times and Investments® Vol:12.2 1st March, 1999
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