Life after the funeral
According to Statistics South Africa’s 2018 mid-year population estimates, life expectancy for males in South Africa was estimated at 61 years and 67 years for females – up from 52 years and 56 years respectively in 2006. This is attributed to a wide range of factors including continuing advances in medicine, better nutrition and lifestyle choices. With South Africans living longer, is their appetite for long-term insurance changing?
It is always a relief to hear that a person’s family received enough money after the death of a breadwinner, to give them peace of mind regarding immediate and future expenses. Consumers who are employed by large organisations are usually part of the company’s pension scheme or group life scheme, but where no such employee benefit exists, life beyond the funeral could be very different for a bereaved family.
Traditionally, funeral insurance has been (and remains) the insurance product that the mass market understands and appreciates most, and therefore sees value in purchasing. While some consumers may be quick to commit to a funeral policy, they may not be as quick to commit to life insurance because of the perceived unaffordability and lack of interest in divulging personal information about their medical history.
A more risk-conscious consumer
Assupol sales statistics for the last two years indicate that consumers are thinking more about life after the funeral. The strong uptake in life insurance products supports this notion. There is also indication that consumers are looking to get something in return for their long-term insurance purchases.
Many prospective life insurance policyholders are interested in long-term insurance products that provide something back if they don’t claim against their policies over a certain period of time. Cashbacks are an apt response to that need as they can be seen as an alternative way to save. The 10 year plus waiting period for these cashbacks is also not a deterrent. Assupol’s 100% Cashback benefit for the Progress 4Sure and Progress 4Life products have seen a high uptake, which sees clients receive payment of all their premiums every 10 or 15 years respectively, if they don’t claim.
The role of financial advisors
Financial advisors play a critical role in not only reaching consumers but also ensuring that they understand their risks and the products available to mitigate those risks.
As the consumer’s first point of in-depth contact with a long-term insurer, the financial advisor must ensure that those interactions are honest (on both sides). It is better for the underwriter to dismiss a historical medical event disclosed by a client, than for the financial advisor to decide for him or herself whether the medical event qualifies as something that should be declared for a life-insurance application. Without this pertinent information, it would be impossible for the underwriter to fairly determine the client’s risk profile, premium and conditions applicable for the life insurance product applied for.
While consumers are becoming more curious about life cover, they are still looking for affordability, and sound advice from their insurer’s representative. The ability to tailor products to clients’ needs builds trust in the insurer’s ability to deliver on their promises. And with an increasingly risk-conscious income-earner, trust and transparency never goes out of style.
