Capitec has flagged a mismatch in how South Africans insure themselves. About 24 million people hold some form of funeral cover, with 10.5 million of them holding more than one policy, but strip funeral cover out and only 19% have life insurance.
The 2025 Insurance Gap Study from ASISA puts the country's life and disability shortfall at R50.4trn, with the average income earner short roughly R3.1m. Lose the breadwinner and the average household cuts spending by 34%, around R7,400 a month.
Interesting insights on SA insurance gap
The gap widened 12.5% a year from R35.4trn at the end of 2021 and now runs about seven times SA's GDP of R7.3trn. It splits into R21.1trn for death and R29.2trn for disability, which is the half almost nobody discusses.
The cause is arithmetic rather than apathy: cover in place grew only 5% a year while formally employed earners rose from 14.3 million to 16.1 million and earnings climbed with them.
Collectively, those earners hold enough cover for 39% of what their households would actually need. ASISA runs the numbers every three years with True South Advisory.
What others are saying about SA insurance gap
BusinessTech reported Capitec's warning and the funeral cover disparity. ASISA notes that about 440 income earners are expected to die each day and 145 to become disabled, while The Citizen puts the average life cover requirement at R2.1m per earner.
This is a distribution problem wearing an education costume
24 million funeral policies against 19% life penetration is not really a failure to understand the products. Funeral cover is cheap, sold everywhere, needs no medicals, pays out fast and matches a cost people have watched their own families carry.
Life cover asks you to price an abstraction two decades out. Capitec is right about the communication gap, and it is also the party that paid Sanlam R1.9bn to own the funeral book and is now selling simplified life cover into that same base. Fair enough, self-interest and accuracy can coexist.
The useful read for anyone employing people here is that group life remains one of the cheapest benefits per rand of perceived value on offer, and most of your team probably believes their funeral policy does a job it does not do.
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