The Discovery Life 2023 annual claims experience shines a spotlight on comprehensive life insurance cover through living benefits, a unique proactive claims feature, and shared-value payouts.
In 2023, Discovery Life paid out R6.45 billion in individual life claims. This included almost R3 billion for death claims. However, the numbers also revealed that R1.5 billion was paid out for severe illness claims, R1 billion for disability claims, and R613 million from the Income Continuation Benefit. Fifty-one percent of the total amount paid was for living benefits (Capital Disability, Severe Illness and Income Continuation Benefits). The Discovery Life 2023 claims experience data also showed that more than one in five life cover claimants had prior severe illness or disability claims before their passing.
This highlights the importance for anyone considering life insurance to consider more than just cover for death. Kashmeera Kanji, Head of Market Analytics and R&D at Discovery Life, explains that life insurance is an incredibly important part of your financial planning in terms of it paying out in the event of a death. But there’s another benefit – it supports one financially through a life-changing event that one would have to live through. “An important consideration for advisers and clients today is to know that they’re not just covering for the risk of death only,” says Kanji.
There’s a misconception that life insurance is only needed if a breadwinner passes away. But that’s just one aspect of being adequately covered. Advisers play a crucial role in society. They ensure that their clients have cover for disabilities, severe illnesses and the possibility that these events could result in someone not being able to earn an income.
Proactive claims
Some of the claims paid out in 2023 were a result of the proactive claims feature. The feature automatically kickstarts the claim process for Discovery Life clients who are members of a Discovery Health Medical Scheme.
Gareth Friedlander, Deputy Chief Executive Officer at Discovery Life, says that through the proactive claims facility, Discovery Life can proactively identify claims using the company’s Discovery Health data. They can then notify clients and their advisers of a potential life insurance claim before they even submit it.
Kanji adds that sometimes there are conditions that clients aren’t aware that they have cover for. The proactive claims feature is incredibly important in firstly identifying these potential claims and then helping clients to fast-track the claims process. This reduces the administrative burden during a difficult time.
Education protection
We are aware that parents have growing concerns about securing their children’s education. Discovery Life’s Global Education Protector provides cover for the costs of a child’s education from crèche to tertiary level if your client or their spouse passes away or becomes severely ill or disabled.
Currently 598 children are receiving an education under the benefit through individual life policies, and R69 million was paid from the Global Education Protector benefit in 2023. This is up by 29% from 2022.
Since education inflation outstrips CPI each year, it is important to ensure that clients have an education protection product that tracks the rising cost of education. Friedlander explains that with education costs, it’s almost like a “double inflation effect”, with education costs going up each year by education inflation and higher costs associated with each level of education.
Discovery Life’s Global Education Protector is designed to keep pace with these variables to cover the actual cost of a child’s education, now and in the future.
Shared Value Insurance Model
Along with comprehensive life insurance protection from Discovery Life, the Shared-value Insurance model allows clients to derive value from their insurance through rewards for managing their health and wellness.
In line with this, Discovery Life offers several rewards-based benefits. Through the PayBack benefit, for example, Discovery Life clients can earn up to 100% of their qualifying premiums back every five years, simply by managing their health and wellness.
In addition, clients can supplement their retirement funding through the Cash Conversion benefit (available for an additional premium, this is a risk benefit, not an investment product) by managing their health and wellness. By adding the Cash Conversion benefit, clients can receive up to 100% of the value of their Life Fund on surviving to age 65, while still retaining the full value of their cover into the future. These payments are made in 10 equal, yearly benefit payments from age 65.
With the University Funder Benefit, included as part of the Global Education Protector, Discovery Life clients can fund up to 100% of their children’s tertiary tuition costs, by simply managing their health and wellness.
Discovery Life has paid over R11.8 billion in PayBacks and R2.5 billion in Cash Conversions to date, and expects to pay R8.1 billion in Cash Conversions over the next five years. In 2023, Discovery Life clients enjoyed R1.9 billion in premium savings through integration with other Discovery products. Discovery Life also expects to pay R2.9 billion for tertiary education through the University Funder Benefit for children currently covered under this benefit.
Value of comprehensive cover
Discovery Life’s 2023 claims analysis demonstrates the power of comprehensive life insurance that extends beyond death benefits. With many of the claims insights relating to living benefits, such as the Capital Disability, Severe Illness and Income Continuation Benefits, it is clear that living benefits are a non-negotiable for financial stability during life-changing events.
Discovery Life’s Shared-value Insurance model also ensures that clients not only get comprehensive financial protection for life-changing events, but they’re also rewarded for living healthily.
2023 Internal statistics based on Individual Life and Group Risk claims and shared-value payouts.