Why PPS qualifying products rock

Cius

Cius

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So I am a huge PPS fan for their core qualifying products. The anciliary stuff like their medical aid or short term insurance I am more nuetral on but the core stuff like life cover and disability/sickness benefits are great. With every other company any profits are retained by the company. With PPS any profits are shared between the members. Typically I get back between 60% and 80% of my total premium in my profit share account but this year I got 99% back.

For those that qualify for PPS it seriously makes no sense to be with anyone else for any qualifying product.

Oh, and by Qualifying product I mean those products that count towards the profit share. Not all PPS products are qualifying.
 
Agreed.
Just to clarify - by "get back" you mean added to your profit share account which will pay out on retirement.

It would be wrong to use the total allocation to the profit share account in your calculation of the % of premiums you get back.
You should only use the year's bonus allocations. The investment gains are earned on the balance of the profit share account, and does not represent a discount on premiums. (if these amounts were physically paid out in the past and invested elsewhere, you would have earned a return regardless of the premiums you pay to PPS).

If I calculate my total allocation/premiums on qualifying products for 2016 = 170%
Bonus allocations 2016/premiums on qualifying products = 82%. This is the correct discount on premiums % for the year.
 
I have been keeping track of the return on the PPS apportionment account since 2003. The return for 2016 was 8.25%, which is exeptional relative to markets in 2016 eg: JSE ALSI 2.63% MSCI World index -5.89%.
Below I show the annual returns for PPS (left) vs the Allan Gray Balanced fund (Right) - one of the most successful funds in SA following a similar investment strategy to PPS. Over the 14 years PPS averaged an annual return of 15.9% vs AG Balanced 15.7%


2003 11.65% 23.34%
2004 28.90% 23.38%
2005 37.96% 36.47%
2006 32.12% 29.84%
2007 12.29% 13.22%
2008 -10.17% -1.84%
2009 29.59% 13.98%
2010 14.32% 10.42%
2011 7.65% 11.83%
2012 18.39% 13.32%
2013 23.71% 23.72%
2014 11.42% 9.00%
2015 5.84% 12.30%
2016 8.25% 6.30%

Annualised 15.90% 15.69%
 
Thanks! Did not realize the 99% included the growth of the underlying fund. Makes sense. Still, its very good and I am more than happy with that! Also found your return numbers very interesting!
 
What's the min qualification needed for PPS again?
 
Paid 19k premiums last year. Profit share amount increased by 18k. Win
 
I'm too stupid to be allowed to get anything with PPS (boohoo) but my wife has life insurance with them . How could we check if her signed up products qualify ... We have been trying to get access to PPS portal but for some unknown reason we have not been winning for the last few weeks.
 
InternetLuddite said:
I'm too stupid to be allowed to get anything with PPS (boohoo) but my wife has life insurance with them . How could we check if her signed up products qualify ... We have been trying to get access to PPS portal but for some unknown reason we have not been winning for the last few weeks.
Click to expand...

Call them or your broker and ask.
 
Well I just got told that an offer of "your premiums will be refunded to you" (verbatim from the underwriters letter) translates to me owing PPS money as they have since looked at what I've paid (totaling about R40,000) and what their costs and broker fees are and conclude that despite zero claims, I have underpaid (but I'm up-to-date on my policy payments.. so go figure).
The offer and the action are incompatible, and the calculation which manages to neutralise any refund despite zero claim seems highly suspicious and for that reason I would recommend you steer clear of PPS.
 
For what product?

Makes no sense unless you were not disclosing something like being a smoker and they found out.
 
Mutual insurance company in SA for people with 4 year degrees or equivalent. They mainly focus on life cover, sickness, dread disease etc but a lot of side products have popped up over the years. The difference is they are not for profit. Fee paying members are the owners so when it makes a profit that profit is distributed amoung the members into their profit share account which you get at age 55.

So for instance I got my profit share notice yesterday and my profit share account gained 35K this year, 19K of which was investment return. My total premiums paid for the same year where 35K. Hence all I did was pay life, sickness, and disability cover to them as I have always done but most of what I paid got paid back to me in the profit share account which is like an RA essentially. If I paid those same premiums to any other company I'd get nothing back. The profit is theirs to keep.
 
How do you find their premiums compare to other companies?

At 35k minus the 16k profit share you are effectively paying 19k per year. Would be interested to know how much similar cover would cost from elsewhere.
 
sloe-joe said:
How do you find their premiums compare to other companies?

At 35k minus the 16k profit share you are effectively paying 19k per year. Would be interested to know how much similar cover would cost from elsewhere.
Click to expand...
For life cover I know they were very cheap when I initially quoted. When I graduated they where quoting R50 I think for the cover I wanted and the of the other 5 companies I quoted the next best was over R100. However that being said they offer a hugely reduced rate for people under the age of 30. At your 30th birthday the premiums jump a lot. This is because as a society aimed at graduates they know for accountants etc their first 3 years of work they get paid peanuts compared to later so under 30 you get to pay a lot less. It is cheaper though as far as I am aware mainly due to the fact that as a risk group people who studied tend to be lower risk.

On the disability cover its also not fully comparable. At the big 4 bank where I work my built in disability cover is not really job specific. As a knowledge worker if I get a brain injury and am unable to code but can still work as say a cleaner there are some holes in the wording of the banks disability cover. PPS on the other hand is very job specific. If you are a surgeon and damage a hand for instance you get full pay. So I prefer being with PPS for the cover.

So anyways, for life cover, disability, dread disease etc PPS is what I would always recommend. The side products not so much. I have a PPS RA and they have been mediocre. Was on Profmed for a while and they where average. PPS short term (house and car insurance) is just a PPS broker (you are actually with Hollard). They are not as good, but still competitive I guess.
 
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