From barriers to benefits: increasing life insurance access for South Africans
Published Date: 02/12/2025
Source: By Melody Cloete, Training Specialist at Bidvest Life
Only one in ten South African adults has life insurance1. Moreover, in 2022, South Africa’s 14.3 million income earners collectively had only enough life and disability cover to meet 45% of their households’ total insurance needs2. This means that approximately 90% of households would struggle to meet their financial obligations if the primary income earner were to pass away or become disabled, with no alternative source of income available.
These figures underscore a significant gap: more South Africans need adequate life insurance to safeguard themselves now and ensure that their beneficiaries are cared for in the future. Yet, feedback from Bidvest Life’s top financial advisers reveals a common misperception among younger clients: affordability is a key barrier. Many also believe that life insurance is only relevant later in life or once they have families3.
This raises two critical questions:
- How can we as an industry make life insurance more affordable and appealing to promote greater inclusivity?
- And how can advisers effectively challenge and change misconceptions about life insurance?
Addressing these questions is vital if we are to bridge the insurance gap and build a more financially resilient society.
Go beyond the traditional FNA
To effectively serve the underinsured and uninsured, advisers must start by understanding their unique financial challenges and priorities. A well-conducted Financial Needs Analysis (FNA) is central to this process, especially when paired with thoughtful questions and active listening to gain a clear picture of each client’s circumstances.
An FNA helps to identify key priorities, such as protecting income, managing debt, or securing a family’s financial future. With these insights, advisers can recommend tailored solutions that address specific risks while staying within their clients’ budgets. This personalised approach builds trust, makes life insurance more accessible, and positions it as an essential part of a sound financial plan for younger clients.
Start by covering the most likely risks
A younger person’s most likely risk is being unable to earn an income, and so it is always wise to lead with income protection.
Bidvest Life research shows that a 30-year-old male has a 15% chance of dying before the end of his working career – but a 91% chance of being unable to work for a period of two weeks or more during this time4. Additionally, Bidvest Life’s 2023 Claims Report shows that Millennials (28-43-years-old) were 55 times more likely to claim on their income protection benefits than their death benefits during the year. This dropped to 17 times when looking at income protection versus death claims across all ages5.
For example, at just 28, Cherine Lombard, a Bidvest Life policyholder, was diagnosed with melanoma in her eye. Thanks to her income protection and critical illness policy, she received a monthly income for 12 months and a lump sum payout, enabling her to focus on her recovery and make life-changing decisions.
Millennials also accounted for 50% of all Bidvest Life’s income protection claims in 2023, but only 12% of its death claims. It is also important to note that, in 2023, 49% of income protection claims were made by policyholders who had previously claimed on the same policy6.
Balancing affordability with risks
Income protection is an easy starting point when engaging the under- and uninsured because it offers significant value at an affordable price. When it comes to income protection, clients can protect their income from as little as R100 per month7.
As advisers, your expert guidance helps them balance affordability constraints with their risks. For this younger demographic especially, making life insurance tangible and helping them to see it as an essential purchase that they are likely to benefit from multiple times throughout their careers is paramount.
1 The Financial Sector Conduct Authority: 2022 Financial Sector Outlook Study. Not including funeral cover
2 The Association for Savings and Investment SA: 2022 Life and Disability Insurance Gap Study
3 5 6 Bidvest Life 2023 Claims Report
4 Non-smoker. Retirement age 70. 2019 Risk Reality Survey
7 T’s and C’s apply
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