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Three of South Africa’s big life insurance companies - Liberty, Momentum and Sanlam - collectively paid out about R12.7 billion in life, disability and critical illness claims last year. The three insurers, which released their 2018 claims statistics within the past two weeks, paid out most of this money on death claims (about R9.5bn).

Looking at numbers of claims (rather than the amounts paid out), disability and critical illness claims account for an increasingly large proportion. At Liberty, 69% of claims from its new-generation Lifestyle Protector product fell into this category, prompting Johan Minnie, the managing executive of customer and adviser experience at Liberty, to remark: “Traditionally, life insurance has been more appropriately described as death insurance because the policy pays money to beneficiaries at the policyholder’s death. 

"However, advances in medical technology and early diagnosis of critical illness are seeing more people recovering from adverse events. Now claimants and their beneficiaries need to manage the cost of survival, and it is time that the industry changes the conversation.”

Cancer and cardiovascular disease remain the two biggest health threats to South Africans, accounting for more than half of all claims across the board.

Life cover

Liberty reported that 30.5% of death claims were for cardiovascular disease, 24.6% for cancer, 9.9% for respiratory disease, 8.1% for renal disorders, and 7.2% for suicide. The average age of death was 64. Cardiovascular disease accounted for 25% of Sanlam’s claims, which, it says, aligns with the Heart Foundation’s 2017 report that found heart disease to be South Africa’s second-biggest killer after HIV/Aids.

Dr Marion Morkel, the chief medical officer at Sanlam, says: “The statistics emphasise the huge cardiovascular burden affecting the South African population as a result of lifestyle diseases. Unless we address our underlying obesity and hypertension challenge, this burden will continue on an upward trajectory.”

Accidental death was the second biggest cause for claims (18%) under Sanlam’s Matrix life cover range, with motor vehicle accidents accounting for 39% of these.

Severe illness cover

Cancer accounted for 61% of Sanlam’s severe illness claims. Most claims were paid in respect of clients 46 years and older. Among women, 80% of claims were for cancer, 31% of which were for breast cancer and 6% for skin cancer. Among men, 45% of claims were for cancer, of which 33% were for prostate cancer. Momentum’s 2018 statistics show that cancer (45%) and cardiovascular-related diseases (26%) dominated claim payouts linked to critical illnesses. At younger ages, women had about twice the number of claims than men, and most of these related to female cancers, specifically breast cancer.

At Liberty, 32.3% of men’s cancer claims were for prostate cancer, while breast cancer made up nearly half of cancer claims for women.

Disability and income protection cover

Lump-sum disability and income protection claims show a more varied array of causes, and while cancer features strongly, so do accidents and musculoskeletal conditions. The highest cause on Liberty’s income protection plan was retrenchment (38% of claims, where retrenchment cover was bought separately) .

Momentum’s 2018 claim statistics showed that women claimed more often among younger policyholders, below age 50, but from age 50 onwards, 73% of disability claims were by men. Says George Kolbe, the head of marketing for Momentum Retail Life Insurance: “To provide the best possible cover against the financial consequences of a disability or impairment event, it is vital to focus on comprehensive disability benefits which include both functional impairment and occupation-based cover.”

PERSONAL FINANCE