The latest Association for Savings and Investment South Africa’s (ASISA) Life and Disability Insurance Gap Study released in October 2025 shows that more households than ever are at risk of losing income security in the event of a breadwinner’s death, disability or critical illness. The study revealed that the shortfall between the cover South Africans need to maintain their standard of living and what they actually have stands at R50.4 trillion; R21.1 trillion for death events and R29.2 trillion for disability events. This represents a 12.5% increase per year since 2021.

For the first time, the study included critical illness, providing a clearer picture of the risks South Africans face, not only in death, but in living with illness or disability.

This highlights the urgent need to educate South Africans about the importance of long-term insurance and a stronger culture of protection, says Schalk Malan, Head of Insurance at Liberty and the Standard Bank Group.

“For many South African families, the loss of a breadwinner is not just a tragedy, it is a financial breaking point. The research shows that most South Africans insure only 20–50% of their future income, yet the ability to earn is our greatest asset.

Addressing the insurance gap is not just about protecting income it’s about whether a family can still survive when that income is gone.”

Critical illness cover missing

Research from Liberty, as revealed during a media event to unpack the real-world impact of the insurance gap and to discuss meaningful ways in which it can be addressed, consistently shows that across all income segments, critical illness cover remains the least adopted form of insurance.

The result is that people insure death, but not what happens if they must live with illness. At a time when health risks are rising, the lack of uptake highlights the need to entrench the value of critical illness cover as indispensable to financial security and household sustainability. Critical illness cover protects families from the double blow of lost income and rising medical costs and without it one diagnosis can undo a lifetime of financial planning, adds David Jewell, Head of SA Retail Life and Savings at Liberty.

Why South Africans remain underinsured

Despite the scale of the gap, the barriers are often simple. Insurance is perceived as too expensive, products are often complex and difficult to understand. When claims are made ,decisions are often delayed or avoided and as demonstrated by ASISA’s report, many people do not fully understand their needs.

Behavioural factors further compound the issue. “The biggest enemy isn’t cost, it’s inertia. People default to doing nothing,” says Shalia Naidoo, Head of Behavioural Science,  Insurance and Asset Management, Standard Bank group. “Insurance also suffers from present bias because every rand today feels more urgent than protection tomorrow.”

Closing the gap starts with action

Closing South Africa’s insurance gap will require a combination of better education, simpler products, and greater access to financial advice. For individuals, the first step is understanding their own risk and ensuring they have the right mix of cover in place.

“When it comes to long term protection, no one solution fits all. That’s why it’s essential to journey with a qualified financial adviser,” says Lelane Bezuidenhout, CEO at the Financial Planning Institute of Southern Africa. Financial Advisers provide holistic financial advice that helps families understand their evolving needs, choose the right mix of cover, and build resilience against life’s uncertainties.

More than a challenge

While the insurance gap presents a significant societal risk, it also represents a major opportunity, particularly for banks.

Malan adds: “The insurance gap is a significant, addressable opportunity.  Clients can afford solutions, but the industry must remove barriers such as affordability and cost pressures. With the right solutions, pricing, and distribution models, the gap becomes a highly addressable market for advisers, insurers, and shareholders alike.”

Integrated, bank-linked offerings extend reach into broader client segments, while banks’ scale and infrastructure enable the delivery of more affordable products, especially at entry level. Banks can also improve access and affordability, using existing client relationships and lending touchpoints to seamlessly embed insurance into everyday financial journeys.

Scaling access through advice and human-centred solutions

Liberty’s open market strategy and strong distribution network means it is well positioned to address the insurance gap. Liberty Advisory Partners already operate at scale, with more than 2,000 advisers and continues to expand its capability to meet growing demand.

As the insurance and asset management arm of the Standard Bank Group, Liberty combines reach with a clear purpose: to grow and protect what matters most. Its approach is grounded in certainty, simplicity and humanity, delivering solutions that are accessible, relevant and built around real customer needs.

By focusing on affordable cover, fair pricing and products that are easy to understand, Liberty is working to meet people where they are, while providing the reassurance and long-term financial security families need when it matters most.