According to Asisa’s 2025 Insurance Gap Study, South Africa’s life and disability insurance shortfall has ballooned to R50.4 trillion - up from R35.4 trillion just three years ago. It’s a staggering figure, roughly seven times the size of the country’s GDP. But behind that number are millions of families who would face devastating choices if a breadwinner died or became disabled.
In fact, the average South African income earner has only 39% of the life and disability cover they need. Put another way, most households would have to slash their living expenses by about a third overnight if tragedy struck.
For too many families, that’s not a hypothetical scenario - it’s a lived reality.
The growing protection gap
The insurance gap is the difference between the cover people have and what they’d need to maintain their current standard of living if an income earner passed away or became permanently disabled.
The latest study found that the number of formally employed South Africans has grown rapidly, from 14.3 million to 16.1 million in just three years. But while more people are earning, most remain inadequately insured. Rising living costs, stagnant wages, and competing financial priorities make it hard to make provision for longer term insurance.
When “later” becomes too late
For many South Africans, life insurance is something to “get to later.” Funeral cover, on the other hand, feels more immediate - it’s tangible, practical, and deeply embedded in our culture. Making sure loved ones can be laid to rest with dignity is a top priority, especially when families have experienced the chaos that comes from not having it.
But what happens after the funeral?
That’s where the real financial pressure begins. Without sufficient life or disability cover, households can quickly find themselves in crisis, unable to pay rent or school fees, dipping into savings (if there are any), or taking on debt just to stay afloat.
Why bundling your cover makes sense
This is where a simple shift in thinking can make a big difference. Instead of treating funeral, life, and disability insurance as separate (or optional) pieces, bundling them together can create a layered safety net that covers both immediate and long-term needs.
That’s exactly what Simply’s Flexi Cover for families and staff members aim to do: give South Africans affordable access to all three core options under one roof.
Here’s why that matters:
- Funeral cover provides fast, practical support when it’s needed most, helping families cover funeral costs and bring loved ones home, with payouts made within 48 hours of receiving documents.
- Life cover steps in to replace income after death, helping dependents keep up with everyday expenses like transport, bond costs, rent, groceries, and school fees.
- Disability cover supports people who become disabled, offering a financial cushion to adjust to new circumstances.
Together, these benefits form a holistic protection package - one that doesn’t just help in a moment of loss but keeps families stable in the months and years that follow.
And because Simply’s model is built around flexibility, businesses and families can choose the level of cover that suits their needs and budget, without drowning in paperwork or admin.
A human issue, not just a financial one
Insurance conversations often revolve around numbers, R50.4tn this, 8.2% of income that. But what those figures really represent are human lives disrupted by events no one can plan for.
Consider this: the average South African family would need around R2.1m in life cover to maintain their standard of living if the primary earner passed away. Yet most have only about R800,000 in cover. And many have absolutely none. That’s a gap of R1.3m - a shortfall that could mean the difference between keeping or losing a home.
The disability gap is even wider. A family would need R3m in cover to stay financially stable if an earner became permanently disabled, but most have less than half of that amount. And disability often comes with added expenses like medical costs and home modifications that quickly add up.
These aren’t just financial setbacks; they’re emotional and social ones, too. The loss of an income can unravel years of hard work, stability, and dignity. It can derail a child’s education or force a family to move.
Insurance doesn’t erase those losses, but it can soften the blow, providing breathing room when everything else feels uncertain.
Closing the gap, step by step
Closing South Africa’s insurance gap won’t happen overnight. Asisa estimates that bridging the divide would require the average income earner to spend an additional 8.2% of their income on cover. That’s a tall order when most households are already stretched thin.
But progress doesn’t have to be all or nothing. Even small steps toward adequate cover can make a meaningful difference.
That might mean:
- Upgrading funeral cover to include life or disability protection.
- Reviewing existing policies to ensure the cover amount matches current income and expenses.
- Using digital tools and calculators (like those offered by insurers such as Simply) to understand how much cover you actually need.
The key is to start the conversation with family members, employers, or financial advisers and to recognise that protection isn’t a luxury. It’s a foundation for financial resilience.
The Asisa study is a wake-up call, but it’s not all doom and gloom. It’s an opportunity and a reminder that South Africans can take charge of their financial security in practical, accessible ways.
Funeral cover will always have a place in our lives. It’s part of who we are. But the real goal should be to look beyond the burial and to ensure families aren’t left vulnerable once the flowers have wilted and the condolences fade.
Life happens. Illness, loss and disability don’t wait until we’re ready. But by bundling funeral, life, and disability cover into one simple package, South Africans can start to close that gap one policy, one paycheck, one family at a time.
Peace of mind isn’t just about today. It’s about protecting the people who’ll still need you tomorrow.
Simply is an authorised FSP 47146. Hollard Life Assurance Company Limited (Reg No. 1952/003004/06), a Licensed Life Insurer and an authorised Financial Services Provider. Terms and conditions apply.
