Beyond death benefits: What claims data reveals about the future of life insurance

Behind every claim is a real story - a family facing uncertainty, a client navigating illness, or a household dealing with a sudden loss of income. Claims are about people, not numbers - and they are proof of whether an insurer truly delivers.

Why protection matters most while you're alive

Traditionally, life insurance focused on death benefits - providing financial support to dependants after a policyholder passes away. But today, many of the most significant financial shocks happen while people are still alive.

Severe illness, disability and loss of income can have long-term financial consequences. At the same time, two major trends are reshaping risk:

• People are living longer due to medical advances
• But they are not necessarily living healthier for longer

Research from the Science of Vitality shows that increases in life expectancy are outpacing gains in healthy life expectancy. This means people are spending a greater proportion of their lives in poor health.

Many conditions that were once fatal - such as cancer, heart attacks and strokes - are now survivable. However, survival often comes with ongoing treatment, a higher risk of recurrence, and lasting financial strain. There may also be additional pressures, such as loss of income and the need to adapt one's lifestyle or home.

As Gareth Friedlander, Deputy CEO of Discovery Life, explains: "Life insurance is no longer about what happens when someone dies. More and more, it's about supporting people while they are still alive - helping them navigate severe illness, disability or income disruption."

This shift is reflected in Discovery Life's claims data. In 2025, 52% of claims paid were for living benefits, including severe illness, disability and income protection. This is more than double the industry average of roughly 25% in 2024.

At the same time, South Africa remains significantly underinsured. The 2025 ASISA Insurance Gap Study found that:

• 85% of earners have no severe illness cover
• The average shortfall in disability cover is approximately R1.8 million

ASISA notes that severe illness is often "the least-covered risk but the most personally felt."

Designing cover for real financial impact

Discovery Life's benefits are designed to reflect the full financial impact of illness and disability - not only immediate medical costs, but the longer-term effects on a client's life.

"Often, people focus on buying very high cover to afford the most expensive treatments for illnesses. Discovery Life's Severe Illness Benefit takes a different approach. A team of medical experts has already considered what multiple of cover a client will need for every condition in our guide, ensuring clients are appropriately protected without guesswork," explains Kashmeera Kanji, Head of Distribution Strategy and Market Analytics.

The LifeTime Severe Illness Benefit pays a minimum of 100% for major conditions such as cancer, stroke and heart attack, and up to 215% depending on the long-term impact and family composition at claim stage; while the LifeTime Capital Disability Benefit pays up to 300% of the insured amount to support both upfront and ongoing needs, including access to advanced assistive medical technology.

Importantly, these benefits are designed not only for the immediate event, but for future claims. As the gap between total and healthy life expectancy widens, the likelihood of multiple or recurring claims increases.

In 2025:

• 22% of severe illness claims were for second and subsequent claims
• On average, around half of these claimants claimed again within the same body system as their previous claim.

Discovery Life's model allows clients to claim again - even for related conditions and at the same or lower severity level, which would often not be covered with traditional life insurance. By providing cover for recurring claims of the same condition, Discovery Life is effectively building guaranteed insurability into the cover, meaning that even if you have claimed, you will still be covered for that condition.

Cancer is one of the top recurring claim conditions. As Dr Deidre Kotze, Chief Medical Officer at Discovery Life, explains: "The treatment is often more intense and costly when a cancer recurs. That's why it is important that our Cancer Relapse Benefit is available to provide up to 100% of the sum assured for the relapse - regardless of stage, but simply because it is a relapse."

The power of early detection

Increased engagement in preventive screening through Vitality and Personal Health Pathways is contributing to earlier disease detection. Personal Health Pathways is an AI-powered programme designed to provide personalised health recommendations.

Earlier diagnosis can lead to:

• Less invasive treatment
• Shorter treatment duration
• Improved long-term outcomes

Dr Kotze notes: "At earlier stages, treatment is typically less invasive, shorter in duration and more cost-effective, while also improving the overall expected outcome." For advisers and clients, this reinforces the importance of integrating insurance protection with proactive health management.

Shared-value insurance: when protection helps prevent risk

Discovery Life's claims experience also shows that insurance can do more than respond to risk - it can actively help reduce it.

Through its Shared-value Insurance Model, Discovery Life integrates protection with behavioural incentives that encourage healthier lifestyles. Programmes such as Vitality and Personal Health Pathways reward clients for engaging in activities that improve their long-term health.

The impact is measurable:

• Vitality members have a life expectancy of 83, compared to 67 in the general insured population in South Africa (Science of Vitality)
• In 2025, highly-engaged clients experience 73% lower mortality risk and 45% lower morbidity risk.

This improvement in health outcomes translates directly into financial value. In 2025, Discovery Life paid out:

• R1.2 billion in PayBacks
• R1.16 billion through the Cash Conversion Benefit.

Shared-value insurance changes the traditional insurance equation - rewarding healthier behaviour while reducing long-term risk. This creates a reinforcing cycle - healthier behaviour leads to lower risk, which strengthens sustainability, and the resulting value is returned to clients.

Innovation that drives better outcomes

Discovery Life continues to evolve this model through innovations such as the Personalised PayBack Booster, linked to Discovery Health's Personal Health Pathways.

• In 2025, more than 15,000 PayBacks were boosted from clients completing recommended screening actions from the PHP programme.
• These actions not only improved client awareness and management of their health, but also resulted in almost 50 Severe Illness Benefit claims (35 were cancer claims), with over 90% of cancer claims detected at early stage.

"We're using AI to help improve our clients' health and even save lives. Personal Health Pathways identifies the next best action for each client, making complex health decisions simpler and prompting important screenings at the right time. This allows us to support clients more proactively and guide them throughout their health journey", explains Friedlander.

This reflects a shift from reactive insurance to more proactive, personalised protection.

What this means for the future of protection

The future of protection lies not only in paying death benefits, but in supporting clients while they are alive - helping them manage illness, maintain financial stability and live longer, healthier lives.

At the same time, shared-value insurance demonstrates how insurers can move beyond simply paying claims to actively improving health outcomes. As Friedlander puts it, "The future of life insurance is proactive, holistic and centred on improving clients' lives long before a claim occurs."

For financial advisers, this provides valuable guidance in helping clients build comprehensive protection strategies. For clients, it offers reassurance that the right cover can support them through life's most uncertain moments.

Discovery Life's claims experience shows that when protection is combined with health engagement and smart incentives, it does more than pay claims - it can change lives.