Rise in claims for early stages of critical illness
LIFE ASSURERS’ STATISTICS REVEAL TRENDS IN SERIOUS ILLNESSES, DISABILITY AND ACCIDENTS Momentum’s claim statistics for last year also show that, contrary to what many people assume, cardiovascular diseases were the leading cause of death for women. Marti
EACH year, the big life assurance companies release statistics of their death, disability and severe illness claims for the previous year and they serve to remind us just how important it is to be adequately covered for death and disability.
These companies exist to pay benefits to policyholders and they pay out billions of rands each year. Conversely, the companies receive billions in premiums from policyholders each year.
When these companies release their annual claims statistics, they like to trumpet about how much they paid out, but what is more pertinent to South Africans are any trends that may be discerned regarding death, disease and accidents.
Recently, Liberty, Sanlam and Momentum each released their retail claims statistics for 2017. Give or take a few million here and there, Liberty paid out R4.5 billion, Sanlam R3.6bn and Momentum R3.7bn.
Most of the money was paid out in death claims: 72% for Liberty, 82% for Sanlam and 73% for Momentum. (For more on Liberty’s claim statistics, see “Most Liberty claims payouts for cancer and heart conditions” on www.persfin.co.za. The story appeared in the April 21 edition of Personal Finance.)
MOMENTUM
Although cancer remains the leading reason for all claims, Momentum’s statistics indicate that cardiovascular disease is the leading cause of death for women. George Kolbe, the head of marketing for life insurance at Momentum, said: “We often associate cardiovascular diseases with men, whereas, in fact, they are also the leading cause of critical illness-related deaths for women.
“The Heart and Stroke Foundation South Africa says that one in four women will have some form of a heart condition before the age of 60 and, that once they reach menopause, the risk of heart disease increases threefold. This is in line with our statistics, which indicate that, over the past three years, the death rate linked to cardiovascular diseases, for women, increased by 50%.”
For the fourth consecutive year, Momentum has also seen an increase in the number of claims for early stages of critical illnesses. Kolbe said this is viewed as a positive trend, because it shows that people are seeking medical intervention earlier, when there is the highest probability of a successful outcome and treatment is likely to be less expensive.
A worrying trend showing up in the Momentum statistics is the increase in dementia claims. The figures indicate that the prevalence of Alzheimer’s disease and other forms of dementia is low at younger ages but nearly doubles with every five years after the age of 65.
Kolbe said the number of claims for dementia-related diseases almost doubled from 2016 to 2017. Also, looking at claims spanning the two years, most were for clients 70 years and older, with women having a higher prevalence than men (see “Dementia increasing rapidly worldwide”).
Some take-outs from Momentum’s 2017 claims statistics:
• Over the past five years, the claim amounts paid out have risen by an average of 11.2% a year.
• Momentum paid 11 461 claims in 2017, or more than 31 claims a day.
• For each woman who died in a motor vehicle accident in 2017, five men died in motor vehicle accidents.
Some of Momentum’s largest claims in 2017 were: • A death claim of R36.7 million. • A critical illness claim of R5.4m.
• A lump-sum disability claim of R9.9m.
• An income protection claim of R321 000 a month.
SANLAM
Karin Muller, the chief executive of Sanlam Individual Life, said Sanlam’s 2017 claim statistics gave important insights into current health and lifestyle trends.
“We can compare data with previous years in order to make credible conclusions about the health state of South Africans,” Muller said.
“Cancer as a reason for severe illness claims is constantly rising. In 2010, it made up 36% of severe illness claims admitted; in 2017, it was the cause behind 59% of these claims. The same can be said of diseases affecting the bones, back, joints and connective tissue. In 2014, these made up 11% as the cause of disability claims, whereas last year it was the cause of 22% of claims.
“Regarding income protection benefits, accidents, as well as conditions affecting the bones, back, joints and connective tissue were the main causes of claims admitted over the past six years.”
Some take-outs from Sanlam’s 2017 claims statistics:
• Death: Most accidental death claims were paid in respect of clients aged between 35 and 55 years. The biggest amount paid for a single death claim in 2017 was R20.4m.
• Severe illness: Cancers and tumours accounted for 59% of these claims, heart attacks accounted for 10%, coronary artery bypass surgery made up 7%, while strokes and comas accounted for 5% respectively. For both men and women, most severe illness claims admitted were for cancer.
• Lump-sum disability: The majority of claims were paid in respect of clients aged between 46 and 55 years. For both men (15%) and women (39%), most claims were for diseases affecting bones, back, joints and connective tissue.
• Income protection: Most claims (30%) were for bones, back, joints and connective tissue problems, with mental disorders ranking second at 13%. Most claims for men (31%) related to accidents, while for women most claims were for diseases of the bones, back, joints and connective tissue (37%).