By: Natasha Archary
More South Africans are opting for risk cover that pays out offshore in US Dollars, according to latest data from Discovery Life.
On the 10th anniversary of Discover Life’s Dollar Life Plan, the company released research that reveals how South Africans are diversifying their risk cover.
Since inception of the Dollar Life Plan, Discovery Life has noted a year-on-year increase in premium income from offshore risk planning, averaging a 20% growth per year.
Premium volumes have more than doubled over the last 5-years when compared to the first 5-years.
Gareth Friedlander, Discovery Life Deputy CEO explained why a diversified risk protection is becoming the more popular choice with South African clients.
“Traditionally, risk cover such as life insurance was held locally, through rand denominated policies, but, as with investing, more South Africans are holding a mix of local and offshore portfolios to hedge against currency volatility.
Two in 3 Dollar Life policyholders also hold local policies, and where clients have both, they hold 40% in offshore cover.
This tracks with many South Africans being globally interconnected and having both local and offshore liabilities and responsibilities.
For example, more people are embracing opportunities abroad while maintaining connections to home.
Or, due to South Africa’s low cost of living compared to Europe and North America, locals are returning home or based locally, while maintaining overseas interests.”
A need for South Africans to match their highly specialised medical needs is another reason more people are opting for risk cover that pays out in Dollars.
Complex cancer treatments can cost in excess of R1 million a year and medical devices can cost almost R2 million, of which 3 in every 4 devices are imported into the country.
These costs are growing at a much faster rate than South African inflation.
The Discovery Life Dollar Life plan is an offshore life insurance policy that pays out, offshore, in U.S. dollars in the event of the policyholder’s death, disability, or severe illness.
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