The 2005 FinScope survey into financial usage and behaviour in South Africa found that only 13% of people have some form of life insurance. Insurance penetration levels remain extremely low in the LSM 1-5 population and only 4% have formal life assurance cover. Many people claim not to understand life insurance works and give unaffordability as the main reason for not buying cover.
According to Lenerd Louw, CEO of Lifedirect, South Africa's first truly direct life insurance provider: These figures are unacceptable.
Life insurance is an absolute necessity, not only for peace of mind, but as a means of protecting the financial security of your family, and making sure they are safeguarded in the untimely event of your death.
Everyone, regardless of how much income they earn, should have a life insurance policy in place and we have taken this into account when designing our product offering."
1Lifedirect believes that affordability and access are the greatest hinders to purchasing life insurance for the lower-income market. The company also believes that education is vital and therefore, will soon be embarking on a lower-income market awareness drive.
During our educational drive we aim to convey that purchasing life insurance does not have to be daunting, confusing or expensive," says Louw. The direct life insurance model is simple and straightforward, and you don't need a broker to understand it. There are also no complicated investment components attached to our offering.
Lately, the South African life insurance industry has been shrouded in negativity and bad press. This has probably caused much confusion and distrust amongst consumers. 1Lifedirect aims to change perceptions with its new, fresh approach to purchasing life insurance.
At 1Lifedirect, we believe that life is for living and shouldn't be spent hassling with insurance, and that is why we have chosen to make the process of acquiring life insurance as simple and straightforward as possible, ultimately saving consumers money and valuable time", concludes Louw.