Discovery Life’s Global E increases access to tertia
While the right to education is indisputable, many challenges persist that prevent access to quality education, particularly at tertiary level. The reality is that it can cost more than R2.2-million to educate a child from crèche through to the end of their tertiary education. With the average South African family having 2.29 children, this means they would need to spend approximately R5 million to educate their children at a private school. These statistics are contextualised by the fact that one in every four children will experience the life-changing event of a parent passing away, or becoming ill or disabled, during their schooling years.
Discovery Life has introduced an innovative insurance product with these growing challenges in saving for education in mind. It not only comprehensively protects a child’s education to the conclusion of tertiary education, but also uses the parent’s health and wellness management to fund up to 100% of their child’s tertiary education, even they don’t claim from their life insurance.
Using health and wellness to help fund tertiary education
Discovery Life’s business model works to address certain societal issues — such as lifestyle-related health conditions — by motivating positive behaviour change and rewarding the improved health of their policyholders. This is achieved through it’s shared-value insurance model, whereby all parties involved benefit from the positive behaviour of its policyholders. By encouraging clients to manage their health and wellness through the Vitality programme, Discovery Life experiences lower claims, fewer withdrawals and an overall healthier insurance book. This results in significant risk savings that provide value, which is then returned to clients. Clients enjoy better value through lower premiums, enhanced benefits and improved health.
This shared-value model resonates globally, as seen with the Discovery-owned UK companies VitalityLife and VitalityHealth, their partnership with Ping An Health in China, and their partnership with AIA in Australia and southeast Asia, to name a few. Globally, Vitality now has more than seven million members, and is growing by over 150 000 members per month. All of these companies have seen the value of using Vitality to improve the health of their clients and pass on the value generated by this back to them.
The aforementioned sharedvalue model has shown impressive results for Discovery Life; their clients with Gold and Diamond Vitality status now have a life expectancy of 87 — on par with some of the highest life expectancies in the world. One of the ways in which Discovery Life has returned the value generated is through the PayBack benefit, through which they return up to 50% of their clients’ life insurance premiums, based on how well they managed their health and wellness. To date, Discovery Life has paid out over R2.9-billion in premium paybacks.
With the success of their sharedvalue model, and given the challenges currently facing protecting and funding for education, particularly tertiary education, Discovery Life researchers turned their attention to tailoring a unique sharedvalue insurance model to help overcome these challenges.
By optimising the shared-value insurance model through longterm rewards tailored to the needs of the individual, Discovery Life has been able to take education protection to the next level. By providing appropriately aligned, long-term rewards that are aligned with parents’ intrinsic motivations to provide for their children’s education, these parents are not just improving their health and wellness behaviour over the short term, but also forming healthy habits over the long term. This creates substantially more risk savings for Discovery Life, over a much longer period of time. The resultant longterm risk savings derived through this optimised shared-value model can then be channelled into a benefit mechanism that not only protects children’s full education against life-changing events, but channels their parents’ improved health and wellness into funding their children’s tertiary tuition fees.
Saving for and protecting education
The importance of both saving for and protecting education is evident, given the current trends in education.
Children are starting school at younger ages
For the average child, parents have to save R5 722 every month from birth to fund the education journey from primary school level. The average child now starts their edu-