Getting life insurance the traditional way can be a bit of a pain – literally and figuratively. Long, drawn-out questionnaires, lots of paperwork and formalities, days, if not weeks, of processing and of course, blood samples and medical examinations! In today’s age of lockdowns and social distancing, that’s simply not an option.
That’s why a growing number of life insurers are offering low-touch, low underwriting options that allow South African consumers to buy their life insurance online as easily as they would buy a hoodie or pair of sneakers. This offers a quick solution for people looking to get life cover during lockdown, says Marius Botha, the MD of life insurer Stangen.
No-test life products allow consumers to buy a limited amount of life cover by answering four or five simple questions without the need for a single medical test. The amount of cover available depends on the amount of information the consumer is prepared to provide: by answering a few more questions to allow the insurer to assess their risk better, the insurable amount can shift to R1 500 000, or even as high as R10 million life cover, depending on the responses to the questions.
“At Stangen, we cut out full blood tests for medical underwriting three years ago, with only a small percentage of customers sent for an HIV test based on a scorecard. Our Express Life product cuts out the need for even an HIV test, as your cover is calculated using an online health questionnaire,” said Botha.
If customers choose this option, they can convert their product to a more comprehensive option with higher cover amounts as well as additional benefits such as Salary Protection, Critical Illness, and Disability at a later stage if they want to.
No-test life insurance is ideally suited for young, healthy consumers, who typically need enough life insurance cover to pay off a home loan and any outstanding debt, and provide some level of income replacement for their spouse and children on the occurrence of a permanent occupational disability. It’s also getting traction with digitally-savvy consumers who don’t necessarily want to speak to a call centre agent or broker.
While Stangen doesn’t see itself as a fully digital insurer, Botha says it’s vital that insurers allow consumers to replicate many steps of a typical online buying journey – starting with ‘window shopping’ to find the right product, and being able to use online resources, like this calculator, to help consumers work out their specific needs and budget before they buy.
“For some, once they’ve have had the ease and simplicity of an online buying experience, they don’t want any human interaction. That’s why we offer the ability to manage a policy online as well, including updating beneficiary details, increasing existing cover, and even adding additional benefits like disability, critical illness and salary protection cover. Our online, digitally-savvy consumers expect no less,” said Botha. The same functionality can also be rolled out to brokers and/or customers who still prefer to be guided by a personal financial planner.