Only 10% of South Africans are reported to have life insurance in the FSCA’s 2022 Financial Sector Outlook Study. This is a concerning drop from the 12% reported in 2019, likely due to SA’s tough economy, challenging life cover application processes and continued complexity of life cover products. Capitec, South Africa’s digital bank, has launched Capitec Life Cover, a life cover solution that is “more affordable, transparent and simple, offering a quick and easy application process, three different payout types, and premiums that don’t increase annually”.
Gerrie Fourie, CEO of Capitec, says Capitec wants to break the barriers, enabling more South Africans to obtain crucial life insurance solutions.
“South Africa’s vast insurance gap is likely due to people’s experience of life insurance as complicated, expensive, and intimidating. The complex terms and conditions, invasive medical tests, lack of transparency around premiums and prohibitive selling practices deter many from getting the cover they need to protect loved ones. We’re committed to helping South Africans overcome these obstacles by providing a simple, affordable, accessible and personalised life insurance solution.”
An affordable solution with premiums that don’t increase
In line with its focus on transparency and affordability, Capitec’s life cover premiums will not increase annually. This will give clients certainty over life costs unless additional cover is taken, putting the clients in control of their affordability. This is unlike the rest of the industry, where premiums tend to increase by 5-8% annually without corresponding increases in cover.
Fourie adds, “Premium increases are one of the main reasons people cancel their life insurance, leaving them vulnerable.”
Tailored to meet South African needs
Understanding that every client’s needs are unique, Capitec Life Cover offers clients the flexibility to choose or combine three payout options:
- A lump sum: This option provides a one-time payment to cover immediate expenses such as outstanding debts or other large financial needs. Beneficiaries can manage the funds according to their priorities, ensuring they can address critical financial needs.
- A monthly income: The second option is a monthly income paid to beneficiaries for a period of up to 24 months. It provides a steady and predictable income stream during the time it matters most, and is particularly beneficial for families who rely on a regular income to maintain their standard of living.
- A payout for children’s needs: The third option gets paid into an umbrella trust designed to care for children’s education and other long-term needs. This trust ensures that the funds are managed responsibly and used exclusively for the children’s needs like school fees, uniform costs, groceries etc.
“Choice is a key part of our personalisation model. We realise that a mother’s priority may be ensuring her kids can stay in school if something happens to her, while an entrepreneur may need a lump sum to settle business debts. That’s why we let clients decide what mix of payouts will best protect their loved ones,” adds Fourie.
A simple application with no medical tests
Capitec says its life cover boasts one of the simplest application processes in the industry. Clients can access cover tailored to their needs by answering six to eight questions that are easy to understand and do not require clients to go for medical tests. The application takes less than 10 minutes and can be done online via the Capitec app or at any of our over 800 Capitec branches. Capitec clients will know within minutes whether they are covered upon acceptance of the quote.
“We’ve redesigned life cover to benefit our clients. The result is a solution that embodies Capitec’s core fundamentals while cutting out all the complexity. There’s no jargon and no 30-page contracts with complex clauses. We explain everything in plain language that clients can relate to.”
An extension of Capitec’s transparency and accessibility
Transparency is a central aspect of any life insurance solution. Capitec ensures clients won’t encounter any hidden clauses or excessive exclusions designed to avoid payouts when applying for cover. “Throughout the application process, we’re transparent about when we will pay claims and when we won’t, giving clients confidence that we’ll be there for them and their families in their time of need,” says Fourie.
As the leading digital bank, accessibility is another key differentiator, and the solution is fully digitised. Clients can manage their cover, add or change beneficiaries directly on the app, and even submit claims via WhatsApp. Those who prefer in-person service can visit any Capitec branch for assistance.
Fourie concludes, “Our life cover aims to uplift communities and alleviate cycles of poverty by taking care of families’ needs after the death of the breadwinner. Life cover has always been seen as overly complex and inaccessible. We’re changing that by putting the power in clients’ hands. They can now get covered in minutes on our app without paperwork – making life cover simple, affordable and accessible for more South Africans.”
