By Nic Smit, Product and Pricing Executive at Bidvest Life
Our great-grandparents would struggle to understand the lives we live, and it is probable that our grandchildren will lead completely different lives to what we do. Society, health outcomes, and the workforce are evolving and, in turn, so are our needs and risks.
The life insurance industry continues to evolve, driven by both emerging trends and the need to anticipate future challenges. It’s important to continuously refine our products to stay ahead of these shifts. Here’s a look at some key factors that have shaped product innovation at Bidvest Life, and how we’re adapting to meet the evolving needs of tomorrow.
Life cover doesn’t work hard enough for clients
In a country where every working person supports themselves and an average of three dependents1, we need to shift away from traditional life cover, towards products that cover more and cost less.
Traditional life lump sum payouts present two key challenges. First, it’s very difficult to predict exactly how much cover a client will need at the time of their death. Second, large lump sums are often mismanaged, which can leave beneficiaries struggling to meet their ongoing monthly financial obligations.
A more holistic approach – combining a lump sum payout with Life Income benefits, which provide a regular monthly income to the identified beneficiaries when the life insured passes away – helps address both of these challenges. Bidvest Life recently introduced the Life Priority benefit, which provides faster access to a portion of the cover while the main life insurance payout is being processed. This ensures that beneficiaries have immediate financial support for essential expenses like groceries, rent, and school fees during a difficult time.
Many South Africans also rely on multiple funeral policies to ensure their families are financially protected, with the average person holding up to four funeral policies2. The challenge here is that funeral cover is more expensive per rand of cover than underwritten life insurance – while also offering significantly lower cover amounts. However, many funeral policy customers appreciate that they can easily add their immediate family to their policy. Bidvest Life clients can now extend their cover by adding Spouse Life and Child Life benefits to their Life Lump Sum benefits, providing easy access to life cover for spouses and children, at an overall better value.
Critical illnesses are on the rise
In 2023, cancer ranked among the top three claims events for income protection across all age groups3, and it is estimated that incidences of the two most common cancers in South Africa will rise by more than 20% (female breast) and nearly double (prostate) between now and 20304.
The challenge for the industry here is that traditional critical illness lump sum benefits fail to address the ongoing monthly expenses of living with a critical illness. Meanwhile, relying solely on traditional income protection can also leave significant gaps in a client’s cover – these benefits won’t pay out if they are still able to work after a being diagnosed with a critical illness, even if they face major treatment and recovery expenses.
When added to Bidvest Life’s income protection cover, Critical Illness Income guarantees uninterrupted monthly payments for up to 12 months after a diagnosis, even if claimants work during this time.
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The South African workforce is changing
More than 30% of working South Africans are in non-traditional occupations5 like online fitness instructors, ride-hailing drivers and influencers. Bidvest Life launched its Event Based Cover with the intention of making life insurance more accessible to a wider range of occupations, especially those considered previously uninsurable – from those working in the gig economy, to those considered high-risk occupations.
Take for example Bidvest Life policyholder Mr Meyer*, a professional yachtsman who was diagnosed with stage 1 testicular cancer in February 2023. Although he underwent surgery, the cancer later spread to his lungs. Traditionally, he would not have qualified for income protection, but with Event Based Cover, he has been receiving monthly income payments until February 2025. This financial support has allowed him to focus on his recovery without the added stress of lost income.
By leveraging these industry indicators alongside a thorough Financial Needs Analysis (FNA), financial advisers can better assess their clients’ life insurance needs before recommending the optimal combination of products -starting with income protection and addressing any major gaps in their cover to build an efficient and affordable financial plan.
- 1SA Institute of Race Relations
- 2Specialist funeral insurance underwriter, KGA Life
- 3Bidvest Life 2023 Claims Report
- 4https://sajo.org.za/index.php/sajo/article/view/220/616
- 5https://saueo.co.za/2024/12/02/the-gig-economy-challenges-and-opportunities-for-south-africa/
- *Pseudonym used to protect the policyholder’s identity