Life Assurance Questions Raised at Conference

April 20 - At a recent conference in Cape Town, the problem of the growing cost of healthcare in later years was discussed in detail.

A number of top speakers at the International Congress of Actuaries discussed the issue of payment for health and other types of care as people in the Western world traditionally live longer and longer.

Life assurance experts heard that as medicine improves, more people are kept alive after chronic illnesses, leading to higher long term or frail care costs.

One of the participants in the conference, Wolfgang Droste from Germany, spoke about how long term care policies have failed in many developed countries, including France, Israel and the United States.

Some of the problems facing life insurance groups were the fact that they had not correctly projected the life expectancies of those that had been insured, nor had they estimated correctly the extent to which policy holders would claim from the insurance groups.

Interesting statistics were also heard. For example, in 2000, there were 72,000 around the globe who had reached their centennial year.  However, by 2050, that number is expected to reach 830,000.

In addition, over half the children born today are expected to reach their 100th year.

So what do people need to do in order to provide for themselves in later years?

Momentum Life advises that if a person is 25 years from retirement, they should be putting away around R2000 a month so that they will be able to benefit from full time care for a period of 15 years.

The cost of frail care facilities in many South African retirement homes could range from R4,500 to R16,000 a month.

South Africans should contact their insurance brokers to discuss different options to ensure that they are well covered for all eventualities.