Latest news with #GarethFriedlander
The Citizen
23-07-2025
- Business
- The Citizen
The smart move: How having life cover when you're young is a power play for your future
While living benefits are important, it is still important to have life cover if you have parent, child dependants or debt. Concerts, weddings, and wild adventures – your crew is making memories. What about your future? Life insurance may not be on your radar yet, but locking it in early could be the smartest financial decision you ever make. This Savings Month (July), Discovery Life shares insights on why young professionals should consider the invaluable benefits of life cover. When you're in your early 20s to mid-30s, life insurance is probably the last thing on your mind. It's easy to think, 'I'll deal with that later'; 'I already have cover through work'; or 'I'm healthy now, so I'll wait'. However, waiting for 'later' could come at a large cost to those with the majority of their future earnings still ahead of them. Do you have a plan if you're no longer able to earn a salary due to a life-changing health diagnosis or a permanent disability? How would you pay your rent or bond, for groceries, medical aid, car and family responsibilities? 'What many young people are unaware of is that life insurance offers far more than just cover that pays out when someone passes away. Life insurance is an incredibly powerful tool and can be a financial safety net if a severe illness or disability stops an individual from being able to earn an income,' says Gareth Friedlander, Discovery Life Deputy CEO. Younger than 30? You're probably underinsured A 2022 Association for Savings and Investment South Africa (ASISA) Life and Disability Insurance Gap Study revealed that the average income earner aged 30 and younger is underinsured. This means they will be unable to maintain their own, or their dependents' current lifestyle if they become disabled or pass away. The average income earner aged 30 and younger earns a little over R10,000 per month, but typically needs more than R2.7 million in disability cover to maintain their standard of living post claim. On average, they only have disability cover of around R1 million, leaving an insurance gap of R1.7 million. 'The insurance gap for South Africans under 30 is concerning,' says Friedlander. 'Having holistic life cover in place that includes income protection, severe illness cover, and disability cover when you're young is one of the smartest things you can do.' How living benefits are an insurance lifeline for young people 'Along with paying out an insured amount to your loved ones if you pass away, life insurance can also protect you against financial risk if something unpredictable happens while you're alive,' explains Friedlander. The three main 'living benefits' are income protection, severe illness cover, and disability cover. Income protection – This benefit pays you a regular income if you are unable to work due to injury, illness or disability. Severe illness cover – Severe illness cover pays out a lump sum based on the severity level of the illness and can be used to cover costs such as treatment costs and lifestyle modifications. Disability cover – Disability cover pays out a lump sum if you become disabled. It can help cover any associated costs such as buying or maintaining specialised medical equipment, lifestyle modifications or settling debt. Alarmingly, severe illnesses like cancer are increasingly affecting younger people. Over the past 30 years, cancer rates in the G20 nations (which includes South Africa) have increased faster for 25 to 29-year-olds than any other age group – by 22% between 1990 and 2019. This is according to the Financial Times, which analysed data from the Institute for Health Metrics and Evaluation at the University of Washington School of Medicine. Discovery Life's Claims Experience for the 2024 calendar year shows that for severe illness claims, cancer was the leading claim cause at 41%, with heart and artery claims next at 16%, followed by nervous system claims at 13%. Of the severe illness cancer claims, skin cancer was the top cause among men aged 40 and younger (44%), while breast cancer accounted for 43% of cancer claims among women aged 40 and younger. Cancer was also the largest cause of disability claims in this age group (29%). Friedlander adds that two in five income protection claims were paid to clients aged 40 or younger in 2024. One in four of these were for permanent conditions. However, these permanent claims made up 67% of the total rand amount paid out. This highlights the value of income protection, especially for permanent claims where these clients will receive an income going forward. Musculoskeletal claims make up almost one-third of these claims and include, for example, injuries to or surgery for the back and neck, ankles, hands, etc. While living benefits are important, it is still important to have life cover where people have parent or child dependents or debt. Of the death claims in 2024 for those aged 40 and younger, motor vehicle accidents (18%) were the largest cause, followed by heart and artery conditions (16%), and then cancer and trauma, each contributing 14%. For these younger ages, 42% of life cover claims were due to unnatural deaths, highlighting the uncertainty of life. 'Taken altogether, these insights highlight the growing importance of holistic life cover for young people that includes living benefits,' notes Friedlander. The younger and healthier you are, the cheaper your premiums 'Young people also need to know that life insurance premiums are mostly determined by age and health. The younger and healthier you are when you apply, the cheaper your cover is,' explains Friedlander. When you take out life insurance at younger ages, your risk is lower, and you can spread the payments over a longer term. This means that your premiums at earlier ages subsidise your premiums later, resulting in more sustainable premiums at older ages. Waiting to take out cover when you're older, or after you're diagnosed with a chronic condition or severe illness, means higher premiums or potential exclusions from cover entirely. 'Not only does getting life cover when you're young protect your future self and your loved ones, but it also sets a solid foundation for long-term financial wellbeing. Getting life cover when you're young isn't just about planning for the worst. It's about making a confident move that secures your financial journey and your ability to protect what's most important to you. Future you will thank you,' concludes Friedlander. Ready to future-proof your financial plan? Learn more about Discovery Life's suite of protective cover and benefits that reward healthy living and safeguard your financial future.
Zawya
11-04-2025
- Business
- Zawya
South Africa: Discovery Life reveals $571mln payout in 2024 claims
Discovery Life has released its 2024 claims experience report, announcing total payouts of R11.5bn to clients. This includes R6.85bn in individual life insurance claims, R2.4bn in Shared-value rewards for healthy behaviour, and R2.3bn in Group Risk claims. Vitality, Discovery's behaviour-based programme, saw R1bn Cash Conversion payouts. The R6.85bn paid to individual life insurance clients is made up of: Life cover claims: R3.4bn. Living benefit claims: R1.5bn for the Severe Illness Benefit; R933m for the Capital Disability Benefit; and R673m for the Income Continuation Benefit. Additional benefits: over R260m for the Global Education Protector, funeral policies and other benefits. Discovery Life's head of Claims Sylvia Steyn explains, 'In 2024, we paid 99.3% of all claims. Within the remaining 0.7%, 0.4% of claims were repudiated for non-disclosure, 0.2% for misrepresentation, and 0.1% for fraud. This entrenches our track record of paying claims and supporting our clients when they most need their cover.' Discovery Life also paid R2.4bn in Shared-value benefits, comprising R1.4bn in PayBacks, and R1bn in cash conversions. These are financial rewards based on how well clients managed their health and finances. 'I'm proud to say that 2024 was the first time Cash Conversion payouts reached the one-billion mark in a single year,' highlights Discovery Life deputy chief executive officer, Gareth Friedlander. 'This is powered by clients' engagement in Vitality – Discovery's behaviour-based programme that incentivises healthy living. Our latest claims experience also revealed that clients who reached a Gold or Diamond status experienced a 57% lower mortality risk and a 47% lower disability risk, compared to clients who were not part of or did not engage in Vitality. This lowered risk creates previously untapped value that we can return to clients to incentivise them to engage in healthy behaviours.' Most payouts go to living clients The payouts outlined above mean that Discovery Life pays more through living benefits (R3.1bn) and Shared-value rewards (R2.4bn) than for mortality claims (R3.4bn). 'By comparison, the industry pays about 20-30% in living benefits, while Discovery Life is paying out over 60% to clients who are still alive,' adds Friedlander. Cancer dominates; screening boosts early-stage claims The 2024 claims data shows that cancer was the highest cause of death for women (35%). It was also the most common severe illness for both women and men (51% and 37% respectively), and the most common cause of disability among both women and men (34% and 30% respectively). The Discovery Group invests significantly in encouraging and supporting clients to carry out regular health screening. Compared to 2020, the 2024 data shows significant increases in screening for common cancers, with mammograms up 14%, colorectal cancer screening 29% higher and 19% more prostate exams, all of which are hitting all-time highs. Thanks to the increase in screening rates, there has been a 62% increase in early-stage cancer claims compared to 2020's claims on illness cover. 'As a proportion of all cancer claims, lower severity claims continue to have an upward trajectory, showing that these cancers continue to be detected earlier. While Stage 3 and 4 cancers have remained relatively stable over that time, it's in the disability claims for Stage 4 cancers where we're seeing incredible benefits of screening, with those claims dropping 16% since last year,' says Dr Maritha van der Walt, chief medical officer for Discovery Life. Early detection remains key to better outcomes. Data from the Discovery Vitality HealthyFutures model and the US-based Surveillance, Epidemiology, and End Results Program (known as SEER), shows that, on average, someone diagnosed with early-stage breast cancer can expect a 96% five-year survival rate. SEER also found that men who are diagnosed with localised prostate cancer have a 99% five-year survival rate. One in five deaths unnatural Cancer- and heart and artery conditions were prominent in life-cover claims for older age groups. However, looking at causes of death across all age groups, the 2024 data shows deaths occurred for a number of reasons. One in five death claims were due to unnatural causes, with the largest component attributed to suicide at a staggering 35%, followed by motor vehicle accidents at 23%. The high proportion of unnatural deaths highlights the need for comprehensive life cover for everyone, irrespective of underlying health status or age. 'The data also emphasises the importance of taking mental-health concerns seriously, as well as fostering a culture of better driving on South African roads. "I'd like to add that the Discovery Health Medical Scheme's Mental Health Care Programme and Discovery Insure's Vitality Drive programme actively help to address these issues, respectively,' points out Van der Walt. Severe illness cover crucial for older ages In 2024, Discovery Life paid out a total of R1.54bn for 2,900 severe illness claims. Of this, R275m was paid out in second or subsequent claims, with nearly one in three making their third or subsequent illness claim, and some having claimed over 10 times. Additionally, Discovery Life paid out R128m in Converted Severe Illness claims - where a client's disability cover expires and automatically converts to illness cover. 'Illness cover and features like our automatic disability benefit conversion are crucial to ensuring clients have illness protection at older ages. This is very relevant, considering that 28% of severe illness claims are made by clients over 60. Ten years ago, this age group accounted for 11% of our illness claims and five years ago it was 20%. 'While it is natural for claims attributable to this age group to increase as our clients get older, this trend is increasing faster than we'd expect and shows the importance of illness protection at older ages – cover that isn't always accessible or financially viable at those ages, so it is crucial to get this form of cover when you're young,' notes Friedlander. Offshore protection in US dollars Recent geopolitical volatility has highlighted the value of offshore risk protection in diversifying clients' cover - similar to how they might diversify their investments. This approach can provide a hedge against external events that affect exchange rates and also protect against potential future costs and liabilities that move in line with global markets. Discovery Life's Dollar Life Plan pays out claims in US dollars, to provide this sort of risk cover diversification. Since 2014, it has paid out over $34m in claims, with these payouts worth an extra 19% as they are denominated in US dollars. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
