Life insurers paid out R44.2-billion in death-related claim benefits in 2025, settling the majority of claims despite a slight decline in payouts compared with the previous year.
The Association for Savings and Investment South Africa (ASISA) revealed in their latest data that 94.1% of all death claims were honoured across individual life, credit life, funeral and universal life policies.
Over the past five years, payout rates for life and funeral policies have consistently ranged between 94% and 96%.
Claims declined because of dishonesty
Gareth Friedlander, ASISA Life and Risk Board Committee member, said insurers processed a total of 1 080 930 death claims during the year and paid 1 016 794 of them. The remaining claims were declined mainly due to dishonesty, fraud or contractual exclusions, including suicide within the first two years of a policy.
“Policyholders and their beneficiaries should be able to trust their policies will pay when a life-changing event occurs.
“We therefore publish the annual average claims payout rate for ASISA members to provide consumers with the peace of mind that life companies will pay valid claims provided the terms and conditions were met and the policyholder was honest during the application process,” said Friedlander.
Highest payout rate to life insurers
Life insurers recorded the highest payout rates at 96%, while universal life policies achieved an almost perfect payout of 99.9%. Payout for funeral policies stood at 93.2%.
Friedlander said funeral insurance is designed for quick and simple payouts, meaning it does not require limited cover amounts. However, many policies impose a six-month waiting period for natural deaths, to prevent people from taking out covers when they are seriously ill.
Credit life insurance, which settles outstanding debts such as home loans or vehicle finance upon death, recorded a payout rate of 93.1%.
Friedlander emphasised that these policies are linked to loan repayments, and missed payments may cause cover to lapse.
- Life insurers in South Africa paid out R44.2 billion in death-related claims in 2025, with a 94.1% overall payout rate.
- Over the past five years, payout rates for life and funeral policies have consistently ranged between 94% and 96%.
- About 5.9% of claims were declined mainly due to dishonesty, fraud, or contractual exclusions like suicide within two years of the policy start.
- Life insurance policies had the highest payout rate at 96%, universal life policies 99.9%, funeral insurance 93.2%, and credit life insurance 93.1%.
- Funeral insurance includes a six-month waiting period for natural deaths to prevent misuse, while credit life insurance covers debts but may lapse if loan payments are missed.
