Cancer and job losses top list of reasons for South Africans’ insurance claims

Cancer remains the top reason for life insurance claims in South Africa, and retrenchments are taking their toll among young achievers, says Liberty, the country's largest provider of life cover and lifestyle protection between 2002 and 2017.

Every year, the group releases statistics on what it has paid out to policyholders. This helps financial advisers and clients plan for the future and manage life's uncertainties.

Liberty paid a total of R4.46-billion in valid claims last year. Most of these payments (R3.24-billion) were for Life Protection following the death of a client. It paid R691-million in respect of Lifestyle Protection to help claimants adjust after critical illness diagnoses, treatments or other impairments that prevented them from earning their normal income.

Liberty also paid a little more than R525-million for loss-of-income protection, including lump-sum payments (R375-million) and monthly income payments (R151-million).

"Cancer remains the leading cause for claims, at 24.3%, followed by cardiac and cardiovascular conditions at 19.8% of all claims," says Henk Meintjes, head of risk product development at Liberty.

Cancer affected all age groups, making up 16% of all claims for young achievers (or millennials), 21% for young parents, 26% for established providers and 25% for empty-nesters. The top three cancers were female breast cancer, prostate cancer and colon cancer.

Liberty medical officer Dr Thabani Nkwanyana says: "Cancer remains one of the leading causes of death in our society. This is reflected in our claim statistics and has been a recurring trend for the past three years.

"The good news, however, is that cancer treatment is widely available and effective, but works best if the cancer is detected earlier rather than later, so regular check-ups with a GP are highly recommended."

Claims by lifestyle segments

In this volatile market, it’s no surprise that retrenchment was the most common cause of claims for young achievers, making up 17% of their claims.

Cardiovascular causes were the second-most common cause for claims in three segments, at 13% for young parents, 20% for established providers and 22% for empty-nesters. Overall, cardiovascular causes were also responsible for the majority of claims paid in respect of men last year.

Strokes or central nervous system disorders also contributed significantly to total claims paid: 8% of young parents and 8% of established providers. For empty-nesters, who are generally older, respiratory diseases and disorders were responsible for 7% of paid claims.

Everybody is at risk

A new inclusion in this year’s statistics report is a breakdown of the five most frequently stated occupations of claimants: 13% of claims came from business people, 10% from managers, 8% from directors, 3% from administrators and 3% from housewives. This range of occupations shows everyone is at risk of untimely death, disability or critical illness.

The low proportion of claims attributed to housewives and other semi-professional or part-time roles may, however, also provide insight into the risk of underinsurance for these individuals. Many working parents may benefit from group cover but have not effectively planned for the consequences of a severe injury or the passing of the stay-at-home parent.

In addition, Liberty's claim statistics for 2017 break down the top claim causes for all nine provinces in the country. At least 25% of claims from the Northern Cape came from farmers, and 80% of all claims in Limpopo were for life cover. Gauteng recorded four times as many brain-cancer claims as KwaZulu-Natal, and more suicide claims than road-accident claims.

Non-payment of claims

Liberty paid out all valid claims submitted. In 2017, 8.6% of submitted claims were for conditions that did not meet claims requirements and 1.6% were declined due to non-disclosure.

As an organisation, Liberty has a duty to ensure its clients know what they are covered for and that the plans protect them and their families.

Liberty encourages clients to familiarise themselves with the claims criteria and to check in with their financial advisers regularly to make sure they have the correct cover in place. Importantly, clients need to disclose and answer all questions asked in the application honestly and accurately, to ensure that the contract is, and remains, valid.

"Sharing these insights is part of our efforts to educate South Africans on the importance of having the correct insurance cover. We encourage clients to view their relationship with financial advisers as a long-term partnership throughout every life stage,” says Meintjes.

This article was paid for by Liberty Group SA.