FREQUENTLY ASKED QUESTIONS

 

 What is a Sick Pool?

 

It is a common fund formed by a Group to cover individual members of that fund who are sick or injured. It is run in accordance with the Group Constitution. A Pool can be Constituted with or without Group Term Life Coverage.

 

What is Group Term Life Insurance?

 

It is individual Term Life Insurance purchased using the collective buying power of the Group.

 

Are there benefits to Group Life Insurance?

 

Yes. There are several

 

  • Economies of scale – the more members the better the leverage
  • Group Discounts over the entire age grouping
  • Less stringent approval criteria .i.e. automatic acceptance
  • Wider coverage – i.e. coverage to older members
  • More certainty with premium cost- premiums are calculated in 3 year blocks.
  • More responsiveness to claims history – a low claims history is able to be used a bargaining tool when renegotiating at the anniversary of the policy.

 

Why Group Life Insurance?

 

Many industries have a bad name with insurers. Although this is generally unfounded, anecdotal information suggests that the mindset of insurers will not be easily swayed, so coverage is both difficult to obtain and prohibitively expensive to individuals. The power of numbers gives a better result.

 

Is Life Insurance Compulsory?

 

No! It is up to the individual Group. Coverage for a Group is much cheaper than individual cover. Every member of the Group is covered at the same rate. Current group rates are approximately $6.30 per week for cover of $100,000.

 

Is the Pool open to everyone?

 

It is open to all members of  Your Group. The Group will to decide if they allow other individuals, Groups or Associations to join. If they do they are subject to the same terms, conditions, costs and returns. Once the option to join is taken up ALL members must remain in Your Pool while employed with Your Organisation.

 

How does the Sick and Accident Pool system work?

 

It has been developed to satisfy the requirements of legislation allowing members to receive a gift from the Pool when they satisfy the requirements outlined in the Constitution.

 

What is a Constitution?

                                     

This is a document that stipulates the terms and conditions that the membership abides by in the operation of the Pool.

 

 Why do we need to have a Constitution?

 

A properly formulated Constitution ensures that everyone in the Group knows their rights and responsibilities, how the process works, what their level of benefits are and what they can expect from the operation of the Pool.

 

Who formulates the Constitution?

 

Nominated representatives of Your Group with the assistance of SNA.

 

Why is it cost effective?

 

Because of the way it satisfies the law, it is possible to run it with your specific requirements and costs that would not be afforded with any other mechanism. SNA charge a management fee.

 

Why don’t you pay tax on it?

 

Each member has already paid the tax through their wage. The Pool money is deducted from each member's wage after tax and deposited into a non interest bearing account. When a member makes a claim, they receive a gift from the account by way of EFT to their nominated personal account. Any gift received is NOT included in taxable income.

 

Why a Non Interest Bearing Account?

 

If the account is interest bearing, it becomes taxable. No additional income is earned from the money, therefore no tax is due.

 

Can I claim the cost of the Pool on Tax?

 

NO! Life Insurance is not an allowable deduction and the Pool operates on tax free gifts, therefore no tax is claimable. Any perceived benefit from tax deductibility is lost to both the Group, in set up and compliance costs, and to the individual in income tax.

 

Who owns each Pool?

 

Each individual Group has ownership of its Pool funds. The Constitution will bind the operation of the Pool to the Groups requirements.

 

How secure is our money?

 

The concept of the Pool was developed specifically with security in mind:

 

  • All Pool accounts operate by a security coded SNA form and are actioned by the Credit Union according to that form
  • There is no internet or phone banking capability attached to any Pool account 
  • All transactions are by EFT
  • There are no cash transactions
  • Individual member's status in the Pool is constantly monitored
  • Claims are verified for authenticity throughout the life of the claim
  • Each Pool is subject to periodic and random audits

 

Is there an Excess Period?

 

Yes, there is a 21 day Excess Period. Gifts are paid from the 22nd day. All periods are based on calendar days.  

 

Why Calendar Days?

                                 

This takes into account that people do not on average have incidents/accidents on a Monday to Friday basis and members have different rosters.

 

Why have 21 day excess period?

 

Each Pool is designed as a safety net for members of the Group. The 21 day excess period was specifically put in place to ensure that normal injuries and illnesses would not be included. The Pool gift is for those times when a member will go beyond the normal recovery times.

 

Does it pay if I am on Sick Leave/Annual Leave?

 

The criteria for a claim on the Pool are that you are off work and have a Doctors Certificate covering your absence. Payment is not dependant on the member being on leave of any sort, just off work.

 

Look at your own workplace:

 

There are some people who still have their first sick day untaken; others use them all as they get them.

 

Everyone pays in equally and everyone receives equally regardless of their leave accumulation or use.

 

Light duties is not an option, you are either at work or off, nothing in between.

 

How do we claim?

 

When a group forms a Pool they will receive all necessary information on making a claim. Each individual will receive contact and claim details as part of the process.

 

Exactly what happens when you claim?

 

Each claimant follows the Claims Procedure. A Claim Form together with Confirmation Authorities will be sent to them. They fill out the forms, attach their Doctors Certificate (copy) and return it via their preferred method.

 

On receipt of the claim form the details are processed and the authorisation is forwarded to the Credit Union.

 

From the 22nd day of their absence, one week in arrears, the member will receive a gift amount as specified in Your Constitution. This is paid weekly based on per calendar day of absence. This will be paid by EFT into their nominated account.

 

The gift will continue subject to the provision of a Current Doctors Certificate.

 

If the Group takes up the option of Life Cover, the benefit will be paid to the beneficiary named on the deceased members will. If a member does not nominate a beneficiary the money will be paid into his/her estate.

 

What is a Confirmation Authority?

 

It is a form giving authority to SNA to confirm the authenticity of claim dates with the treating Doctor and/or the Employer.

 

Why have a Confirmation Authority?

 

To prevent fraudulent claims being made.

 

What about my Privacy?

 

SNA operates to the National Privacy Principles which are contained in the Privacy Act and viewable at:       http://www.privacy.gov.au/individuals/business

 

Can I use my membership when applying for a loan?

 

Yes. Upon application a form will be sent confirming your status as a member of the Pool and the benefits receivable. This has frequently been used by members to satisfy their lender.

 

Why have SICK N ACCIDENT manage the Pool?

 

This company was formed specifically to manage the day to day running of each Group’s Income Protection Pool. The Directors have 10 years experience in running a Group Pool Scheme and negotiating Group Term Life Insurance on behalf of Groups.

 

How much does SICK N ACCIDENT charge?

 

SNA charge a uniform rate per member per week inclusive of G.S.T. The actual rate is determined by the number of members in your group.

 

How much work is required from the Group?

 

The Group needs to provide a Register of Members on formation of their Pool.

Individuals should have a current will listing beneficiaries if Life Cover is applicable.

 

How much of each members personal information will be required?

 

The only information required for the Register is Name, Date of Birth and Classification.

 

In the case of a member making a claim the additional information required relates only to their claim i.e. Medical Certificate, E.F.T and mailing details.

 

In the case of a death claim, the beneficiary details from their Will and Insurer requested information.

 

How much will it cost us?

 

Premiums will vary from Group to Group depending on the Gift amount and any special inclusions/exclusions and actual membership numbers. As the scheme is self funded, by necessity the equation works by numbers, the smaller the group the more input required to maintain viability.

 

Group Term Life Insurance adds additional costs depending on the makeup of Your Group in terms of average age, sex and job description.

 

Additionally, the final actual cost of your Pool will be determined by what you want to include or exclude from your Constitution.

 

You will only pay for what you use.