Claims payout of over R5 billion shows need for good advice - Old Mutual

Jaco Gouws, Protection Marketing Manager at Old Mutual.

Old Mutual remains the leading player in the industry with a massive R8.2 billion in claims paid out in 2015. This equates to nearly R1million paid out to customers every hour. A total of R5.35 billion was for retail claims in 2015. This includes R3.99 billion in underwritten benefits. R3.1 billion was paid out for death claims, R399 million for disability, R498 million for illness and physical impairment and R8 million for retrenchment.

The latest claim statistics highlight the importance of appropriate risk cover against the diversity of illnesses and disabilities that affect ordinary South Africans every year.

“Old Mutual believes in transparency and through its Greenlight policies was able to pay 96% of all claims received,” says Jaco Gouws, Protection Marketing Manager at Old Mutual. “This is largely because we combine the advice of experienced advisers with thorough underwriting. This allows us to charge an appropriate premium and therefore deliver on our promise by paying your claim when you and your family need it. Our flexible solutions also enable you to tailor your cover as your life changes.”

In 2015, Old Mutual paid 99% of life cover claims with the biggest claim being an advanced life cover payment of R119m due to terminal illness. In 2005 Old Mutual pioneered Immediate Cover that protects customers up to 30 days before we receive the first premium. In 2015, Old Mutual surpassed the R100m mark for Immediate Cover.

Protecting personal income remains one of the cornerstones of a financial plan. In 2015 Old Mutual paid 93% of income disability claims with 60% of all claims being attributed to people under the age of 45 years. Half the disability claims were for females, a significant increase over the last few years.

Old Mutual paid 83% of all severe illness claims due in part to our unmatched severe illness definitions. The so-called big four severe illnesses accounted for 85% of claims. Cancer was the largest proportion of these at 57%, heart attacks amounted to 20%, coronary artery bypass graft to 14%, and strokes to 8%.

“Ironically, the advances in science that improve our chances of surviving cancer, strokes or a heart attack, carry other costs. Survival often comes at a huge financial cost because of lifestyle adjustment, the unexpected expenses of recovering from an illness, and more,” Gouws added.

The age and gender claims statistics reveal that everyone is vulnerable; with the bulk of the claims in the 35 to 55 age group. The ages of those who claimed for severe illnesses were between 35 and 64 and for death claims mostly from the age of 55 onwards.

Gouws says it is important for South Africans to understand that illness and disability can affect anyone. “When most people consider the need for risk cover, they often don’t think about all the possible reasons for illness, disability or death. As a result, many tend to adopt the attitude that it won’t happen to them. However, our claims statistics show just how many things can, and do, go wrong. Nearly R4bn in payouts emphasizes that.

“Breadwinners, especially those with dependents, need to know the financial implications of an illness,” explains Gouws. Cancer, for example, affects one in four South Africans. However, improved diagnosis and treatment has resulted in six out of ten cancer sufferers surviving the disease.

In light of these claims statistics, Gouws says it is critical that people get professional advice that matters to ensure comprehensive and tailored protection that meets their individual needs.