- Insurance group Liberty has urged consumers to get back on track with their insurance premiums.
- The insurer says only 36% of its clients who took up the offer of a premium payment holiday are paying their premiums as per normal again.
- Liberty says it has had to extend the premium relief programme to February 2021.
Many South African consumers are struggling to get back into the rhythm of paying all their bills again after months of premium relief that insurers and banks offered at the beginning of the lockdown.
Life insurer, the Liberty Group told Fin24 on Friday that only 36% of clients who took up the premium holidays are paying their premiums as per normal again. And it's not because they have to catch up missed premiums or increase their monthly payments to pre-lockdown levels.
Liberty said about 11 000 people took out premium relief on its life and living benefits products, some 55 000 clients used the premium skip option on funeral products, and approximately 77 000 clients took premium relief options on investment products. Over 35 000 of those clients have requested further premium relief.
The insurer's Group Sales Director, Johan Minnie, said initially the relief options were supposed to run from April to the end of September. But the group has now extended the relief period until February 2021. To be covered, customers do need to go back to paying their premiums again.
"The reality is that there is no real substitute for being fully up-to-date with your premiums. We introduced relief because it was the best option for many people who may have lost their jobs, had salary reductions, or were simply trying to save money during this uncertain period," said Minnie.
According to the Association for Savings and Investment South Africa (ASISA), local life insurers provided over R1 billion worth of premium relief to more than 458 000 policyholders with premium relief assistance between March and July.
But despite the relief provided, 5.4 million risk policies lapsed across the industry, while some 364 887 recurring premium savings policies - such as endowments and retirement annuities - were surrendered.
Lapses and the resumption of payments after the expiry of premium holidays will likely differ from one insurer to another, said Hennie de Villiers, deputy chair of the ASISA Life and Risk Board Committee. He said that, in his experience, the majority of policyholders who were granted premium relief started paying premiums again at the end of the relief period.