New Study Confirms Underinsurance in South Africa

January 12 - A study commissioned by the Association for Savings and Investment South Africa (ASISA) confirmed that people in the country continue to remain severely underinsured.

According to the study, the nearly 12.5 million income earners between the ages of 16 to 65 in South Africa are underinsured by a whopping R18.4 trillion.

This means that in case of disability, the average South African is underinsured by R900,00, while in the case of death by R600,000.

The overall death gap was R7.3 trillion, while disability was shown to be R11.1 trillion.

A family that does not have sufficient cover will be badly affected should the main breadwinner be disabled or die.

In addition, underinsurance impacts beyond the individual level.

Insurance savings usually form a significant portion of the money that is invested on behalf of citizens for their future. If sufficient funds are not invested, the national savings is affected.

The main reason why South Africans remain underinsured is the fact that many people sacrifice their policies when their financial situation gets tough.

Instead of cutting back on entertainment and luxury goods, they see life and disability insurance as expendable.

ASISA believes that consumer education is very important in order to change this perception.

By encouraging South Africans to see the importance of proper insurance cover, ASISA hopes that next year's gap report will show smaller figures.