Can your clients afford their disability cover gap?

The average South African earner needs around R3 million in disability cover but has only R1.2 million, according to the ASISA 2025 Gap Study. That leaves a disability cover gap of around R1.8 million.

If disability strikes, the financial consequences can be significant. An average earner may need to cut household expenses by 37% or find an additional R9 767 a month to maintain their standard of living. Yet closing the disability cover gap costs around 3% of earnings.

For advisers, that creates an important conversation: are your clients adequately covered for the financial impact of a disability?

Trends matter more than absolutes

Key adviser take-out:overall disability numbers may seem low but looking at the causes of disability reveals a rising trend, which means advisers and their clients may need to reassess their disability cover.

StatsSA numbers show that overall, disability prevalence in the country has fallen since 2011.

• The 2025 Gap Study estimates that 53 013 of the country’s 16.1 million earners will suffer a total and permanent disability each year, equivalent to about 145 people a day.
• Approximately 17% of South Africans live with a disability, according to the National Council of and for Persons with Disabilities.

Taken together, these figures may suggest that the risk of total and permanent disability is relatively low. However, StatsSA has also found that the incidence of disability has risen among older people, with as many as half of people aged 85 and older reporting a disability such as vision or hearing loss.

In addition, a closer look at one of the leading causes of adult disability in South Africa, strokes, suggests that the underlying risk may be higher than headline disability figures imply.

What stroke statistics tell us

• Around 1 in 4 people globally will experience a stroke in their lifetime, according to the World Stroke Organization.
• An estimated 240 South Africans (earners and non-earners) suffer a stroke each day. Around 70 of these strokes are fatal.
• The risk of stroke is three to four times higher for people with high blood pressure.
• A study of stroke patients in Johannesburg found the median age was 57 years.

Stroke survivors often experience short and long-term effects, including temporary or permanent paralysis, speech problems, memory and cognitive impairment, difficulty concentrating, fatigue and depression. Full recovery is possible for some, but many live with a disability for the rest of their lives.

Cut expenses by up to 46% or spend around 3% of income to close the gap

Key adviser take-out: the cost of sufficient disability cover is relatively low compared with the financial adjustments clients may need to make if they are underinsured.

The financial impact of a disability can be extensive once treatment, care and recovery are taken into account. Household expenses frequently rise because of the need for long-term care. Assistive devices, therapy, rehabilitation, medication, home and vehicle adaptations and retraining for new occupations are among the additional costs that often arrive when household income falls or stops altogether.

Top earners, whose take-home pay exceeds R291 364 a year, are particularly exposed:

• Disability gap: around R5 million
• Extra monthly income needed to maintain their lifestyle after a disability: R27 648

  Or expenses that would need to be cut: 46%

Closing the average earner’s R1.8 million disability cover gap costs around 3% of take-home pay. For a client earning R500 000 per year, for example, this would mean paying around an extra R1 000 a month to secure sufficient disability cover.

Essential features to look for in disability cover

Key adviser take-out: look for cover that offers whole-of-life protection, is easy to understand and has a straightforward claims process.

Disability is complex, making disability cover one of the more technical long-term insurance products. Clients need cover that is easy to understand and straightforward to claim against when a covered event occurs.

Key product features for you and your clients to consider include:

Whole-of-life cover

Disability can occur at any age and brings extra costs whether or not the person is still working. Cover that continues beyond working years can be an important consideration.

Straightforward claims process

Notably, 79% of disability insurance complaints to the National Financial Ombud Scheme of South Africa are about declined claims where policy terms and conditions had not been met.

Clear terms, conditions and definitions support a smoother claims process so advisers should look for policies with clear wording and definitions. For example, own-occupation cover may be simpler to assess at claim stage than any-occupation where multiple occupations need to be considered. For event-based disability benefits, payout tiers and event definitions should be clear and unambiguous.

Clients also want transparency on waiting or deferment periods and exclusions that are typically limited to illegal activities, wilful participation in riots or war, self-harm or failure to follow reasonable medical advice.

Premium waivers

These can apply to add-on benefits or remaining cover after a claim, helping clients keep ongoing costs manageable.

Clear ADL definitions

Activities of daily living (ADLs) and advanced or instrumental ADLs are frequently used to assess disability. Basic ADLs cover essential physical needs such as bathing, eating and dressing. Advanced ADLs involve more complex tasks that support independent living, such as managing money. Policies with clear ADL definitions can support a smoother claims process.

Help your clients avoid the disability poverty trap

Around 16% of the world’s population lives with a disability, and people with disabilities generally face higher levels of poverty and fewer economic opportunities. The financial impact can be significant, particularly as non-communicable diseases such as hypertension become more common and people live longer.

For advisers, the opportunity is to help clients put the right cover in place before disability puts their income and household finances under pressure. Sufficient cover, with clear terms, whole-of-life protection and a straightforward claims process, can help clients manage the financial consequences without having to make drastic cuts to their standard of living.