Why UnInsured Employees Are Bad For Business Often businesses assume that their employees will take the necessary steps to insure themselves, but in reality, many people don't. By covering your employees you're not just insuring their financial futures if something happens, you're covering your business too.

Entrepreneurship is not for sissies. It involves dreams and risks. Cash flow is crucial and often thin on the ground, as owners juggle the challenges of overheads and growth.

An entrepreneur or SME owner cannot fall back on the financial cushioning that is characteristic of much larger corporate businesses. That said, as an entrepreneur have you ever thought what would happen if one of your staff members were suddenly unable to provide for their families due to death or disability?

Would their family be left destitute? Would you as a business owner feel obliged to contribute to cover funeral costs and offer support to the family concerned?

If so, you should be considering a group life policy as the financial and emotional strain on the business can be significant. Group cover is generally far cheaper than retail cover.

In many cases, employees can even cancel their individual cover and, in so doing, save a significant amount of money. Recognising both the need and the opportunity, our business, Simply Financial Services, recently introduced an online Group Cover product.

These are our top five questions asked by business owners when considering employee benefits.

1.Why is group life cover better for my employees than their retail alternatives?

Group life insurance holds numerous benefits for individuals. First, since the employer pays the premium, persistency is typically better and dependants are more consistently protected.

Second, the cost of group cover is often far lower (for equivalent cover) than the individual could get directly. Third, better cover may be provided for people with impaired health.

And finally, waiting periods are often waived or shortened. We're convinced that good value group cover is a net positive investment for a company.

2.Is group life cover affordable?

Group life cover starts at very affordable levels. Meaningful cover can be obtained from about R49 per employee per month.

Also, there are ways to structure the payment of premiums in such a way that it becomes part of your employees' total remuneration package. You may for example want to structure it so that the employee makes a contribution, which is matched by the business.

Affordability is obviously important to SME owners and entrepreneurs. Costs need to be weighed against benefits both in terms of increased loyalty and job satisfaction from employees, and the potential cost to the business if a key member of staff is disabled or dies.

3.What does group life cover typically include?

Cover varies a lot from provider to provider and ranges from very simple funeral policies to very complex death and disability cover. Cover can be a multiple of annual salary or a fixed amount of cover for both life and disability, and a fixed amount of cover for family funerals. You should look out for the following when selecting your product:

• Benefits. What's included in the cover? What benefits does it include? In our view, you should look for a product that provides good value protection products (eg. life, disability, family funeral). This caters for as wide a range of scenarios as possible. Be careful you don't end up with a bundle of value added services (eg. free airtime) and very little life or disability cover.
• Free cover limits. Is there a guaranteed amount of cover (the "free cover limit'), up to which your employees are covered for death and disability from both natural and accidental causes (full cover), irrespective of employee numbers?
• Waiting period. How long would you have to wait, from when you take out the policy, before your employees get full cover, rather than just accidental-only cover?
• Pricing. How does the price compare with your alternatives — both group and retail — and how are premiums likely to change over time?

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Q. What's hidden in the fine print?

It's really important to check the fine print, to ensure there are no nasty surprises when there's a claim. Many providers have complex policy rules and documents, and SMEs only discover the details when it's too late. A good barometer is to look at how simple and transparent the sign-up process is, and how user-friendly the policy documents are.

4.What provider should I choose?

Make sure your insurance provider has a reliable track record, and is underwritten by a recognised insurance provider. There are a lot of fly-by-night players out there and you need to ensure that the policy you are buying has the backing of established and well-recognised market players. You need to be confident that your insurer can be trusted to pay when it comes to claim time.

5.How do I go about buying and administering the policy?

Traditionally, brokers have sold group life policies and provided admin support to their clients. Since quite a lot of work is involved and commissions are limited, brokers have not typically been available to SMEs.

As such, there is a long tail of SMEs who don't have group life cover and their employees are at risk. Fortunately, there are now options available that allow SMEs to do it themselves online and for brokers to serve SMEs cost-effectively.

You need to decide whether you want the peace of mind of working through a broker or the speed, control and convenience of doing it yourself online.

In conclusion, we believe group life insurance offers much value and peace of mind for SMEs. While many South Africans have funeral cover, very few have life or disability cover.

As an SME owner or manager, you can show you care by taking a policy for your employees. Not only will you probably save money relative to an equivalent retail product, you'll be amazed at how much your employees will appreciate your care and generosity.

And you'll be able to sleep easy, knowing their families will be taken care of if they die or become disabled.

HEALTHY YOU, HEALTHY BUSINESS

Why getting healthy is imperative if you want to be a high-impact entrepreneur.

DID YOU KNOW? Health is a far more powerful determinant of an individual's happiness than his or her income.

According to the Economic Determinants of Happiness Study, 2010 US Census, self-described "healthy' people were 20% happier on average, while "unhealthy' people were 8.25% less happy. The direction of causality appears to move in both directions; healthier people are happier and happier people are more likely to care for their health.

Eating unhealthily is linked with a 66% increased risk of loss of productivity, while rare exercise is linked with a 50% increased risk of low productivity.

MAKE EXERCISE A PRIORITY: A healthy body will help cultivate a healthy mind. According to the CDC (Centre for Disease Control in the US), 80% of adults don't get the recommended amount of exercise.

The Physical Activity Guidelines for Americans say that adults should get 2.5 hours a week or more of moderate-intensity aerobic activity and two strength training sessions per week.

FOR THE ENTREPRENEUR: Even if you're crazy busy, find ten minutes here and there. It will help with alleviate stress and get those endorphins pumped up to take on business challenges. Your company will thank you for it.