Life cover no longer just for death – it’s about getting paid to live well

In 2024, Discovery Life paid out more through living benefits and rewards than for mortality claims.

The recently published Discovery Life Claims Experience data revealed that between January and December 2024, the insurer paid R3.4 billion in life cover claims due to death.

In contrast, Discovery Life paid out a combined R5.5 billion in living benefits, namely severe illness, disability, and income protection claims, as well as Shared-value rewards, like cash back and retirement funding boosts.

“By comparison, the life insurance industry pays about 20-30% in living benefits, while Discovery Life is paying out over 60% to clients who are still alive,” says Gareth Friedlander, Discovery Life deputy CEO.

“Contrary to industry norms, more Discovery Life clients receive payouts while they’re still alive, not only when they pass away. This flips the life insurance script: with people living longer, life insurance isn’t only about protecting one’s legacy, it’s also about ensuring that clients’ risk portfolios consider both longevity and a well-lived life.”

The importance of diversified risk protection – and taking out cover while you’re young

Medical advances and healthier lifestyles are extending lifespans. According to the World Health Organisation, global life expectancy reached 73.3 years in 2024, an increase of 8.4 years since 1995. Additionally, the number of people aged 60 and older worldwide is set to increase from 1.1 billion in 2023 to 1.4 billion by 2030.

Many of us must now consider how we’ll maintain our lifestyles if something happens while we’re still alive, for example, if we’re unable to work due to a disability or a severe illness diagnosis.

Future-forward insurers like Discovery Life have evolved from passive risk protection that focuses on death claims to a more proactive approach that offers a holistic range of living benefits.

The latest Discovery Life data shows that the insurer paid out R1.5 billion in severe illness benefit claims, R933 million in capital disability benefit claims, and R673 million in income continuation benefit claims.

“These living benefits are no longer nice-to-haves. They’re essential to safeguard one’s quality of life, if something life-changing happens,” says Friedlander.

“Many of us can now expect to live well past 60, and this speaks to the ever-growing importance of diversifying risk protection that goes beyond traditional life cover that only pays out once you pass away.

“I must also point out how critical it is to have the right life cover in place at a younger age – cover that protects future income, offers sufficient disability and severe illness cover, and protects dependants if you have a young family. This not only provides cover at that age when the risks are still prominent, but also because once something happens to you, it’s difficult to get cover for a pre-existing condition.”

Cover that adapts to rising trends in multiple claims, severe illness in older age  

In 2024, Discovery Life paid out R1.54 billion for 2 900 severe illness claims. Of this, R275 million was paid out in second or subsequent claims, with nearly one in three of these making their third or subsequent illness claim, and some having claimed over 10 times.

“There is undoubtedly a growing trend in multiple illness claims, especially in older age, as our data revealed that 28% of severe illness claims now come from people over 60 – a number that’s more than doubled in the past 10 years. This emphasises the need for long-term, comprehensive protection,” highlights Friedlander.

He adds that while only 4% of Discovery Life’s pool of clients have had a previous severe illness claim, that 4% made up almost one in four (22%) of severe illness claims in 2024.

“Once you’ve claimed, your probability of claiming again is incredibly high. Of those, 68% were their second claim, 19% their third, 13% were fourth or more – we’ve had one claimant who has had 14 different severe illness claims. The subsequent claims aren’t necessarily because a condition has worsened; it can often be at similar or even lower severities due to medicine advancements and regular screening.”

Additionally, Discovery Life paid out R128 million in converted severe illness claims, where, at a chosen benefit expiry age (either 65 or 70), a client’s capital disability benefit cover automatically converts to severe illness cover.

“Considering that 28% of severe illness claims are made by clients over 60, this automatic conversion is highly pertinent. Ten years ago, this age group accounted for 11% of our severe illness claims, and five years ago it was 20%. So, we see a rising trend and are accounting for that, especially considering this kind of cover isn’t always accessible or financially possible the older we get.

“This trend reinforces the importance of having comprehensive illness protection in place – long–term cover that adapts as clients age, ensuring that they can live well, even through serious health events.”

How everyone benefits through Discovery Life’s Shared-value model

On top of the dynamic, market-leading cover, what sets Discovery Life apart is its Shared-value insurance model, which rewards clients for managing their health and wellness.

Through integration with Vitality, Discovery’s behaviour-based rewards programme, clients who take proactive steps to stay healthy enjoy significant financial rewards.

The idea is that through Shared-value, clients are incentivised to adopt healthier behaviours through tangible rewards like premium discounts and cashback. Insurers reduce claims and improve retention, and society benefits from a reduced healthcare burden.

“Shared-value incentivises positive behaviour change, which generates money for Discovery Life that wasn’t previously there. That money – or value – is then passed back to all the stakeholders in Discovery Life’s ecosystem,” says Friedlander.

“The beauty of Shared-value is that those positive behaviours can be replicated for health [Discovery Health Medical Scheme’s Vitality Health], driving [Discovery Insure’s Vitality Drive], and money management [Discovery Bank’s Vitality Money].”

Friedlander notes that Discovery Life’s PayBack benefit allows policyholders who engage with Vitality to accrue 50% of their life premiums back, paid in cash, every five years, which is doubled if clients elect to delay those payments by five years.

The Cash Conversion benefit helps clients supplement their retirement funding by paying out up to 100% of the value of a client’s life cover through 10 yearly payments from age 65.

Clients can grow the value of these payments simply by managing their health and wellness before they turn 65.

“To date, Discovery Life has paid out R13.2 billion in PayBacks, and we expect to pay R7 billion in Cash Conversions in the next five years – in fact, we reached the R1 billion for payments in a single year for the first time in 2024. These are real financial rewards powered by Shared-value, and generated through positive behaviour change,” reiterates Friedlander.

“When most people think of life insurance, they think of payouts after death. However, Discovery Life has forged a new paradigm focusing on living benefits and Shared-value rewards. This innovative approach behaviourally and financially incentivises policyholders to live longer and healthier, while at the same time protecting their future. Life insurance is no longer only about what happens once you pass away – it’s about protecting a life worth living,” concludes Friedlander.

Read more about Discovery Life’s 2024 Claims Experience here.

Brought to you by Discovery Life.

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