Recent research conducted on behalf of the Association for Savings and Investment South Africa (ASISA) has confirmed that South African income earners remain critically underinsured in terms of life and disability insurance.
The average South African is now underinsured by R600 000 in the event of death and by R900 000 in the event of disability.
The 2010 Life and Disability Insurance Gap Study reveals the frightening fact that South Africa’s 12.4 million income earners between the ages of 16 and 65 are underinsured by R18.4 trillion.
The study found that the death insurance gap is R7.3 trillion and the disability insurance gap is R11.1 trillion.
Although each effort has been prefabricated to change consumer behaviour, the effect of this has been to lower lapse and surrender rates rather than increase insurance cover. This is a positive sign.
Unfortunately the global financial crisis, the recession and meeter job losses and strain on consumer discretionary spending has had a negative impact on efforts to increase life and disability insurance cover recovery.
Not only does this have implications for individual consumers, and their families who stand exposed and vulnerable to underinsurance on a big scale, but national savings is also affected.
Insurance savings form a massive proportion of the money that is invested on behalf of consumers in the future of the country itself.
At the root of the problem lies the perception that life insurance and disability insurance are expendables that can be sacrificed to consumer spending in other areas such as entertainment, luxury goods and lifestyle products.
Consumer education is seen as critical in addressing these misperceptions and demand of insight into the implications of underinsurance.
Into this arena comes a new website designed to position online products and services, making household insurance quotes, business insurance quotes, life insurance quotes and automobile insurance quotes simple to obtain, while also providing in depth consumer education on all the above.
It is envisaged that many other niche insurance products will be added as insurance companies develop the call centre systems to support online sales.
For interest sake:
GAP STUDY SHOWS THAT SOUTH AFRICAN LIFE AND DISABILITY INSURANCE SHORTFALL REMAINS CRITICAL