demonstrates that the payment would not have been sufficient in many instances . Many families probably had to make difficult financial adjustments during a time when they also had to deal with losing a loved one ,” said De Villiers .
However , according to De Villiers , in 2021 , life insurers noticed an increased uptake of new risk policies by consumers and a drop in the policy lapse rate for the first time in many years .
Young earners
A worrying statistic highlighted by the study is that earners younger than 30 are the most at risk of leaving their families and loved ones destitute . This grouping is most likely to face a substantial life and disability insurance shortfall .
Asisa ’ s figures show earners in this group , on average , have an insurance shortfall of R1.6 million for life cover and R1.7 million for disability cover .
Unfortunately , even those in the next age bracket ( 30 to 39 ) are not faring much better , as the average life insurance shortfall is R1.4 million and R1.8 million for disability cover .
“ Insurance represents a grudge purchase for many earners as there are no immediate tangible returns for the money spent ,” said De Villiers , at the time of the release of the report .
“ Younger people , especially , tend to think that death and disability affect only older people and therefore they are less likely to spend their hard-earned money on insurance premiums .”
Not too late to start
PPS claims statistics confirm the trends as highlighted in the Asisa report . In 2021 , when the pandemic was arguably at its worst , PPS paid R1.8 billion in life cover , R1.095 billion in sickness and R239 million in lump-sum disability benefits .
Payments specifically related to COVID-19 ( where claims were identified as such ) amounted to R1.4 billion .
“ Generally , on analysis of PPS ’ s member database , we know many of our members are also underinsured . So , to an extent , we also see the ‘ insurance gap ’ situation , which Asisa highlighted yet again ,” says Rob Barge , Senior Manager : Life Broker Services Strategy and Marketing at PPS .
“ The message is relatively straightforward for all PPS members and , in fact , all professionals in South Africa : firstly , use a qualified , trusted and expert personal financial adviser ; secondly , follow the advice given , and thirdly , keep the insured amounts in line with current income and other financial needs .
“ It is never too late to start this process or take steps to keep your financial affairs appropriate to your need ,” Barge says .
* Visit www . pps . co . za for more information about life and disability cover for graduate professionals .
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