Life assurers honoured 99.3% of claims against fully underwritten life policies in 2016, paying out a record R13.1 billion.
Fully underwritten life policies require a full underwriting process, which typically involves providing comprehensive answers to questions about your medical history and undergoing a medical examination.
The 2016 death claim benefit statistics released this week by the Association for Savings & Investment South Africa (Asisa) show that providers of fully underwritten policies honoured 35 347 death benefit claims by families (35 983 in 2015).
Hennie de Villiers, the deputy chairman of the Asisa life and risk board committee, says this means that life assurers paid 97 claims, on average, every day last year.
They declined just 261 claims (389 in 2015), to the value of R332 million, during the year. 
“These statistics show that life insurers have a solid track record of paying benefits. In fact, the percentage of death claims paid out has consistently lingered around the 99% mark since the statistics were first collected five years ago,” De Villiers says. 
He adds that the life assurance industry continues to be well capitalised, with assets exceeding liabilities by more than four times the legal reserve buffer.
De Villiers says the main reason supplied by life assurers for rejecting claims is non-disclosure, which involves an act of dishonesty on the part of policyholders. He says non-disclosure accounted for 55.3% of the 261 death benefit claims declined last year.
Non-disclosure is when you fail to disclose information about a medical or lifestyle condition when you take out a policy, in an attempt to secure lower premiums or to obtain cover without exclusions.
De Villiers says it is encouraging to see that incidents of non-disclosure have decreased since 2012, when it accounted for 70.34% of the 352 claims rejected.
Another portion (9.2%) of rejected claims were as a result of the policyholder dying from a condition that had been specifically excluded on their policy. 
Other reasons for claims being rejected were suicide (23.7%, up from 8.3% in 2015) and claims fraud (7.3%). The remaining 4.6% of claims declined last year were rejected for a variety of less common reasons, such as driving while under the influence of alcohol.
“In at least two cases last year, claims were declined where the policyholder was involved in a fatal accident while driving over the legal alcohol limit,” De Villiers says.