Life, funeral and disability cover more important than ever
The global pandemic has driven home various lessons but mainly that life is uncertain and the unexpected can happen at any moment.Heading into another year, many people – especially breadwinners who want to ensure that their families are cared for after they pass on – it is critical to be reminded of the advice given during a period when times were more certain than now.
While we can’t avoid certainties like death, we can prepare for eventualities to ensure that those left behind can mourn without added financial burdens and worries about financial constraints.
Statistics show that Covid continues to take its toll: Reports show that death claims increased by 127% in the third wave and the life insurance industry witnessed the impact of the pandemic first-hand.
In the first two waves of Covid (April 2020 to March 2021), death claims increased by 64% in rand value, according to the Association of Savings and Investment South Africa (ASISA). The third wave, (April 2021 to September 2021) saw death claims increase by 127% in rand value. In the same six months in 2019, before Covid, insurers received just under 370 000 death claims; during the third wave, there were over 565 000 death claims.
These statistics from our neighbouring country are a real eye-opener for us to be more vigilant and to prepare while time still allows. Although times were tough financially, the importance of life insurance and funeral cover was never more evident as seen through the alarming figures reported by ASISA.
Funeral benefits
If there are a few observations to take note of, we can see an increased focus on the importance of funeral benefits.
Where employers haven’t had this type of cover for all staff previously (for example where contract workers aren’t covered for funeral benefits), insurers are looking to introduce funeral benefits. There has also been a need for funeral cover to provide benefits for not only the member, spouse, and children, but to extend this to other family members to include the member’s parents, which is deemed important, especially in rural settings.
Covid not only continues to be an emotionally and mentally devastating issue; it has also severely dented the pocket with associated health risks at a time when one can least afford it.
A few ways to avoid the high costs of Covid and other severe illnesses include:
• Continue screening for serious illnesses. One of the lingering impacts of the coronavirus is the drop in preventative testing and screening of other illnesses, especially cancer.
• Keep healthy by managing chronic conditions, not smoking, as well as reaching and maintaining a healthy body weight. This will make your life cover premiums more affordable.
• Reviewing your financial plans, is the best way to keep your house intact. Review your financial plans to see how you can add extra emergency savings to your budget and ensure you have suitable insurance including life and funeral cover before it's too late.
Changes
Apart from life and funeral cover, Covid has changed the game for disability insurance as well. For years, financial advisors and experts have been sharing advice that emphasizes the importance of financial planning and preparing for the unexpected.
By having insurance protection in place before you get sick or injured you can safeguard your income and your family.
Last year, the Social Security Administration in South Africa estimated that a 20-year-old has a 1 in 4 chance of becoming disabled before they reach retirement age. With such a high chance of becoming disabled, it is a reminder of why products are put on the market to help should such situations arise.
In the meantime, insurers are still trying to determine how to verify some issues from “long Covid.” Unfortunately, some have been denied disability benefits despite being unable to work due to symptoms caused by Covid. Again, it is critical to get regular check-ups and declare symptoms and family history prior to Covid.
Fortunately, the medical sector is developing better tests to properly diagnose these issues for claims.
In conclusion, new waves and preparedness must be considered if you have not done so already. Consider meeting with a trusted financial advisor to discuss your options. At Namforce, we encourage all to act sooner rather than later. When Covid first hit, it happened so quickly that people didn’t recognize the need until it was too late. Seek the best options that are affordable for you and most convenient.
*Martin Shaanika is the managing director of Namforce Life Insurance Ltd.
** Opinion pieces and letters by the public do not necessarily reflect the opinion of the editorial team. The editors reserve the right to abridge original texts. All newspapers of Namibia Media Holdings adhere to the Code of Ethics for Namibian Media, a code established jointly with the Media Ombudsman.