• Millennials accounted for 50% of all Bidvest Life’s income protection claims in 2023
• Millennials were 55x more likely to claim on their income protection benefits than their death benefits
• Choosing the correct waiting period is critical: 42% of unique income protection claims lasted less than 30 days

FOR IMMEDIATE RELEASE

Durban. Thursday, 24 October 2024 – Life insurer Bidvest Life says that millennials (28–43 years old) were 55x more likely to claim on their income protection benefits than their death benefits in 2023. This ratio dropped to 17x when looking at income protection versus death claims across all ages.

Presenting the 2023 Claims Report to media, Nic Smit, Bidvest Life Product and Pricing Executive, said that these statistics provide compelling reasons for financial advisers to lead with income protection cover when engaging young clients: “While death benefits are the traditional starting point when building a life insurance portfolio, death benefit claims for millennials accounted for just 12% of the total number of such claims received during the year.”

Smit noted that, in addition to educating young people on the need for income protection, education around choosing a waiting period is also critical (the waiting period is the number of days a policyholder must be sick or unable to work before their policy will start paying out). The insurer paid out 91.5% of all unique income protection claims lodged during the year, with the leading cause of non-payment being that policyholders tried to claim when the period for which they were unable to work was shorter than the waiting period they had chosen.

The report highlighted that the average duration of an income protection claim was much shorter for younger policyholders than the overall average in 2023. With the statistics showing that younger people tend to have shorter claims durations, the choice of waiting period for young lives becomes even more important. “Given that income protection is usually sold on either a 7- or 30-day waiting period, and 42% of claims that were paid on the 7-day waiting period would not have been paid on a 30-day waiting period, it is vital that young policyholders understand their real needs and risks, and are covered accordingly,” said Smit.

Further, the report confirms the insurer’s commitment to helping policyholders out when they need it most, by paying these claims as quickly as possible. Eight percent of income protection claims were paid within 24 hours of being lodged, 33% within one week, and 73% within a month. The fastest payout was under two hours (on the childbirth benefit).

In 2023, childbirth was the leading income protection claims event among millennials, while cancer was among the top three events across the age spectrum. Business owners and financial advisers were the top claiming occupations across all ages.

Feedback from Bidvest Life’s top financial advisers is that many people consider affordability a barrier to entry for life insurance. However, Smit said younger lives pay considerably less for life insurance than older lives, and income protection provides an affordable foundation for every financial plan.

Policyholders have the option of adding Critical Illness (CI) Income to their Temporary Income Protection benefits, which offers a potential opportunity to access cover for critical illnesses at a more affordable premium than traditional critical illness cover. CI Income boosts income protection payouts by an extra 30% for up to 12 months, regardless of whether a policyholder is able to work or not. Proving its value, this benefit boosted 4% of income protection claims in 2023, but represented 25% of the total amount paid for income protection claims across the board. In 2023, 60% of Temporary Income Protection and Event Based Income was sold with Critical Illness Income.

While income protection is valuable at any stage of life, the need for comprehensive death cover is also important. There are multiple affordable and efficient options available for policyholders to secure the right cover. In 2023, just under one-quarter of death claims included Life Income on its own or in combination with lump sum cover. Combining income and lump sum benefits that pay out on death provides a more balanced and cost-effective solution beyond a single traditional lump sum benefit.

“Bidvest Life’s 2023 Claims Report shows a very real need for younger people to have life insurance that protects them from life’s curveballs. This is especially true for millennials, who may yet still be uninsured, but face the most likely risks. The younger you are, the more affordable your life insurance will be – so it makes sense to start building your portfolio as soon as you can,” said Smit.

*Disclaimer: T’s and C’s apply.

ENDS.

About Bidvest Life

Bidvest Life is a life insurer that has protected the salaries of all working South Africans for over 29 years from the risk of injury, illness or death through a combination of Income Protection, disability, critical illness and life cover options. For more information visit bidvestlife.co.za or follow us on Facebook, LinkedIn or X.