Why South African seniors are being priced out of insurance coverage

Did you know there are more people over the age of 65 than those under the age of 5? According to the United Nations Population Fund (UNFPA), the world reached this demographic milestone for the first time in 2018. While this shift is reshaping economies, social systems, and industries globally, it is sparking particular concern for the local insurance industry.

In many South African households, insurance plays a critical role in helping families prepare for the unexpected. However, the industry is facing growing pressure to adapt, particularly as South Africans are living longer and the global ageing population trend begins to highlight issues with existing insurance structures and pricing.

For many, this is personal. People who’ve faithfully paid into insurance policies for 30 or 40 years are now finding themselves excluded or unable to afford cover just as their needs increase. It’s a difficult contradiction: living longer is a gift, yet it brings with it the burden of rising risk that many insurers are no longer willing, or able, to carry beyond a certain age.

At Finchoice, our customer insights show just how important insurance remains, especially funeral cover. The majority of our policyholders are over 45, many of whom are the financial backbone of their families. These are often multigenerational households with three to five people under one roof, with up to nineteen members on one plan. A third are single parents, and 45% have dependents. They are planners, people trying to ensure their families are not left financially exposed in difficult times.

But affordability and predictability matter. With 90% of this segment earning between R3,000 and R15,000 per month, insurance needs to reflect real financial pressures. As an example, in South Africa, funerals are not one-day events. They are extended, community-centered occasions involving transport, catering, and cultural responsibilities that often stretch across several days. The financial demands are high, and the emotional stakes are even higher. Without reliable funeral cover, families face significant debt or are forced to scale back important traditions.

The solution isn’t simply to sell more policies; it’s to build better ones. This is why lower fees, flexible, and transparent policies are critical, not only to ensure financial protection but to uphold dignity. This involves allowing policyholders, particularly those in older age bands, to easily access policy information and adjust their plans via an app as and when needed. If monthly premiums become unaffordable, they should be able to switch to a more affordable plan online. This approach has ensured our customers remain covered as circumstances change. If younger generations see insurance as rigid or unreliable, they may opt out altogether. The industry must invest in better education around what policies offer, and build products that keep pace with how people live and age today – cover that is fair, reliable, and built for the long term.

* Campbell is the director of marketing and operations at Finchoice.

PERSONAL FINANCE