This article is an open invitation to Capitec or someone like them to look at life assurance as their next service offering. Life Assurance companies in SA have specialised in making their products overly complicated which makes comparisons very difficult.
Numerous international specialists have looked at the domestic industry and advised them to offer more simplified products but this advice has been ignored. In my view, this is a situation that Treasury (government) should be looking at more closely.
As an example, it is nearly impossible for any non-specialist to understand the differences between different severe illness benefits from the life companies in SA. If you get cancer, one company will pay you from the time you have been diagnosed whilst another company will only pay in stages depending on the severity of the cancer.
Insurance payments best for the afflicted?Who knows how soon you should be paid after you get cancer? Surely there is a method that is best for the afflicted person and surely this should be the way that all companies pay out their benefits? By implication, it means that some companies are doing what is best for themselves not their clients.
As a start, someone with the right knowledge should look at all these different benefits and provide us a model for the best range of benefits that we need for life, disability and illness insurance. From there, we need to instruct the life companies to standardise their terminology for these benefits so that we can compare them and make a slightly more informed decisions when choosing the right product.
life assurance industry does not like transparencyAs we have seen in the past, the life assurance industry does not like this type of transparency, (just ask Rob Rusconi) so I am convinced that they must be forced to change because they will not do so on their own.
Until then, I am fearful for those who need life assurance and related cover. You need to find a highly experienced and ethical specialist and there are only a handful of those.
*Author: Warren Ingram, CFP®, has been advising people about their money management since 1996. He is a director of Galileo Capital, www.galileocapital.co.za.
This article was first published on Moneyweb.co.za
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