A financial technology start-up company is taking on the established life assurers with its low-cost combined life-disability-funeral products.

Simply Financial Services launched Simply just over six months ago. It offers products for families and employers of domestic workers, and will soon extend its offering to small-business owners.

Anthony Miller, the chief executive of Cape Town-based Simply Financial Services, says the business is targeting the mass market by selling easy-to-understand, affordable life assurance products in an industry that writes up R8.5 billion of business a year.

“When a breadwinner dies, his or her dependants are often consigned to poverty – that’s the harsh reality many face,” Miller says.

“A large percentage of the 14 million South African households earning under R30 000 a month do not have life assurance, as many feel it is too expensive and find the sign-up process daunting.”

On the other hand, Miller says, South Africans are often significantly over-insured when it comes to funeral cover. 

Simply’s combined life-disability-funeral insurance products are accessible via mobile phone, on the premise that this is the only way most South Africans can access the internet.

It takes less than 10 minutes to apply for cover. You have to submit your personal details and answer three questions about your health, which include whether you knowingly have a serious disease such as HIV/Aids or diabetes. Depending on your answers, you will qualify for full life cover or accidental life cover only. No blood or medical tests are required. 

For the first six months, cover is limited to accident cover. This “waiting period” is made very clear in the company’s marketing material and the policy sent to you.

The disability cover is a simple impairment policy that pays out a lump sum if you permanently lose the use of a limb or limbs, your sight or speech, or suffer severe burns. It does not compensate you for lost income because of illness.

Simply sells two products that allow you to choose the level of life, disability and funeral cover, to a maximum amount for each type of risk:

• Life, disability and funeral cover for breadwinners who earn between R5 000 and R25 000 a month. Cover is limited to R1.5m for death, R1.5m for disability and R50 000 for funeral expenses.

• Life, disability and funeral cover for employees whose employers pay the premiums. The product is designed primarily for employers of domestic workers. The product has lower maximum cover: R200 000 for death, R400 000 for disability and R50 000 for funeral expenses.

As an example of what it costs, a 30-year-old woman who earns R4 500 a month can, for a premium of R92 a month, buy life cover of R100 000, disability cover of R150 000 and family funeral cover (the woman, her spouse and up to five children) of R15 000.

The policies are underwritten by Old Mutual Alternative Risk Transfer and re-insured by RGA Reinsurance Company of South Africa.