Most South Africans aren’t financially prepared for the cost of surviving a critical illness. With an estimated 85% of income earners having no critical illness cover, millions are left exposed when cancer, heart disease, stroke or other major health conditions strike — and these conditions are rising sharply across the country.
This mismatch between real-world risk and real-world behaviour isn’t just a financial issue — it’s deeply psychological. Three well-established behavioural biases help explain why so many people postpone the decision to protect themselves:
- Optimism bias leads us to believe serious illness “won’t happen to me”. We understand a disease like cancer is common, yet subconsciously we rate our own chances as lower.
- Normalcy bias convinces us that because we’ve always been healthy, life will continue unchanged.
- Illusion of control whispers that eating well, exercising or simply being young insulates us from catastrophic health events.
Together, these create a dangerous form of complacency — one that has contributed to a national protection gap now estimated at more than R50-trillion. When a diagnosis finally arrives, families face not only emotional shock but crushing financial strain. Recovery today can span years and requires much more than a single payout. Modern survival often comes with cycles of treatment, remission, relapses, lifestyle adjustments, ongoing medical devices and escalating costs.
Add to this a general lack of awareness and understanding. Many people are simply not aware of the specific benefits and coverage provided by critical illness insurance, the potential for high treatment costs beyond medical aid or insurance limits, or the likelihood of serious illness disrupting income. The complexity of insurance products can also make them difficult to understand, leading to inaction.
A R50.4-trillion gap meets a rising risk reality
These psychological blind spots have contributed to an enormous protection gap. The Association for Savings and Investment (ASISA) South Africa’s latest Insurance Gap Study describes a “staggering” shortfall in coverage, with the total life and disability protection gap widening to R50.4-trillion by the end of 2024. For the first time, the study also measured critical illness cover, revealing it to a glaring weak spot in South African households.
On average, South Africans have critical illness cover equal to only 26% of one year’s income, while more than 85% have none. This means that when serious illness strikes, most families are forced to improvise financially, often with devastating consequences. Independent analyses published by Moonstone and South Africa Today highlight that even formally employed South Africans are underinsured by trillions of rand for illnesses that are increasingly likely to occur.
Compounding this gap is the changing landscape of disease and survival. Medical advances mean that a diagnosis of cancer, stroke or heart disease is far more survivable today than it was a few decades ago. These conditions are no longer automatic death sentences — they are increasingly treatable. Five-year survival rates for most cancers have improved dramatically, rising from roughly 50% in the 1970s to about 70% today in developed regions.
The real challenge now is shifting public perception: from 'It won’t happen to me' to 'If it happens to me, I want to survive — financially and physically.’
In South Africa, better oncology care and earlier detection are saving more lives than ever before. Yet surviving a critical illness is only the first step: what follows is often a long, expensive journey of recovery. As one industry commentator noted, “survival is not the finish line” when it comes to critical illness.
Paradoxically, higher survival rates mean more people are living with the aftermath — ongoing treatment, rehabilitation, lifestyle adjustments and escalating out-of-pocket costs. At the same time, serious illnesses are striking earlier and more frequently than many realise. Globally, there has been a 79% surge in new cancer cases among people under 50 over the past three decades, and South Africa mirrors this trend. The National Cancer Registry reports more than 100,000 new cancer cases each year, with lifestyle-related and early-onset cancers on the rise. The data shatter the notion that cancer and other dread diseases are “old-age problems”. In short, the risk environment is worsening even as our optimism bias convinces us that life will stay normal.
Finally, the cost of illness has exploded, raising the stakes for anyone without cover. Medical inflation in South Africa far outpaces general inflation, with private healthcare costs estimated to have risen nearly 300% over the past decade. Cutting-edge cancer therapies can exceed R1m per patient per year, and even those with medical aid often face massive co-payments and uncovered expenses. Only about 16% of South Africans belong to a medical scheme, leaving most to absorb these shocks alone. It’s not uncommon for a critical illness to deplete a family’s savings, push them into debt, or force impossible choices between treatment and daily living costs. This financial fallout is often as traumatic as the illness itself.
Where traditional cover falls short
Traditional critical illness policies were designed around a single payout triggered at diagnosis. This worked when treatment options were limited and the journey was binary: illness or death. But modern medicine has changed the story. Today, a cancer diagnosis might be followed by remission, then a relapse five or 10 years later, another remission, and a survival milestone decades down the line.
Yet many older policies still treat illness as a single event, not a lifespan pattern. They typically cap payouts at 100% of the insured amount, limit multiple claims, and provide little support for long-term recovery or lifestyle adjustment.
This is exactly where the insurance industry has begun to innovate — not by adding gimmicks or confusing bells and whistles, but by redesigning cover around how illness unfolds.
New life insurance models are addressing this gap. Rather than building a product around a single lump-sum cheque, they are focusing on the entire journey — from diagnosis through treatment, remission, relapse and long-term survival.
A mindset shift is urgently needed
Behavioural psychology gives us deep insight into why South Africans delay critical illness cover. But insight without action still leaves families vulnerable. A modern protection strategy must acknowledge both our cognitive blind spots and the evolving nature of serious illness.
The innovations emerging in the market — like relapse protection, survival costs, rare disease cover, medical device funding, integrated wellness ecosystems and seamless onboarding — represent a meaningful step forward.
The real challenge now is shifting public perception: from “It won’t happen to me” to “If it happens to me, I want to survive — financially and physically.”
In an era where survival is increasingly possible but increasingly costly, being prepared is no longer pessimistic — it is responsible.
• Greg Smith is the Dis-Chem Life Founder and Joint CEO
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