Survivors' claims from assurers show need for illness cover
Cancer once again accounted for the bulk of life cover claims at the big insurers during 2018, and the incidence of the disease across all age groups appears to be increasing.The disease comprised 20% of all claims at Momentum, about 28% at Liberty and about 27% at Sanlam.Key lessons from the latest claims statistics are that South Africans have insufficient cover and there is a greater need for cover for the survival of a traumatic event rather than for death cover only.Despite the catch-all name of life cover, life policies can include other benefits which not only pay out when you die but also if you contract a critical illness, become disabled and if you lose income because you cannot work due to illness or injury.According to Johan Minnie, managing executive of customer and adviser experience at Liberty, in 2018 just over 69% of benefits were paid out to surviving claimants and only 30% were death claims."Traditionally, life insurance has been more appropriately described as death insurance because the policy pays money to beneficiaries at the policyholder's death. However, advances in medical technology and early diagnosis of critical illness are seeing more people recovering from adverse events. "Now claimants and their beneficiaries need to manage the cost of survival and it is time that the industry changed the conversation," he says.Ursula Torr, lead actuarial specialist at Liberty, says that more customers bought death cover while neglecting survival benefits such as disability, income protection and critical illness cover."Of the people who had claimed both critical illness and loss of income benefits, 12% subsequently claimed life cover, which means that 88% of protection needs happened during their lives, not at the end of it."According to the National Cancer Registry of SA, nine in 10 bowel cancer patients will survive. About 70% of lung cancer patients will survive if diagnosed early. If caught in the earliest stages, more than 90% of breast and ovarian cancer patients will survive.Though cancer was not the main reason for death claims last year, it was the top cause of critical illness claims for all three life companies, giving further proof that you need more cover for surviving a serious illness or injury.At Sanlam, cancer made up 16% of death claims on its Matrix risk product but was the top reason for lump sum disability claims at 25%, while a huge 61% of claims were for severe illness.Cancer was also the cause of 45% of critical illness claims at Momentum and just over 41% of critical illness claims at Liberty.In fact, the percentage of critical illness payouts due to cancer was 18% higher last year compared with 2017, said George Kolbe, the head of marketing for Momentum Individual Life. Thabani Nkwanyana, Liberty's medical officer, said cancer remained the highest cause of claims related to critical illness, death and disability. "The reality of a cancer diagnosis is that the treatment and recovery after a diagnosis can take many years."At 32.3%, prostate cancer was the most prominent claim cause among men at Liberty, while breast cancer made up nearly 50% of cancer claims for women. Colon and rectal cancer were the second-most common cancer claims in men and women at 14.3% and 7.5% respectively, Nkwanyana said.For Momentum, 54% of cancer claims under critical illness from women were for breast cancer, and 38% of cancer claims from men were for prostate cancer.Though cancer may correctly be expected to be the highest claim cause in people of 55 and over, younger South Africans are also claiming for cancer, Liberty's figures show.Cancer was the highest claim cause in the 35-44 age group (19.45%) and in the 45-54 age group (26.46%). In the age group 24-34, cancer was at 16.44%, the second-highest cause for a claim.Momentum's Kolbe says a total of 33 child critical illness claims were paid last year, an increase of 22% on the previous year. Also, 44% of all critical illness claims for children last year were for cancer.Most chronic diseases can be prevented by making smarter lifestyle choices such as exercising regularly, eating a balanced diet, and avoiding smoking and excessive alcohol consumption, he said.