Capitec sounds the alarm over R50.4 trillion gap in South Africa
Capitec says South Africans are overinsured when it comes to funeral insurance, with many families neglecting to buy life insurance.
South Africa’s largest bank by customers said that there is a massive disconnect between life and funeral cover.
A 2025 Insurance Gap Study released by the Association for Savings and Investment South Africa found that South Africa’s life and disability insurance gap has widened to R50.4 trillion.
The average South African income earner has a shortfall of around R3.1 million in death and disability cover.
After the death of a breadwinner, the average household would have to cut spending by 34%, about R7,400 every month, to stay afloat.
Capitec said that funeral cover has a far higher take-up among South Africans, with 24 million having some form of funeral cover. 10.5 million of these policyholders have more than one policy.
Data from the FSCA also showed that funeral cover is the most commonly held insurance product in the country. The share of South Africans with life insurance drops to 19% when funeral cover is excluded.
The disparity arises because customers often view funeral and life insurance as interchangeable, despite the very different roles they play in protecting a family’s future.
While funeral cover helps families ease the financial burden of saying goodbye, life cover protects for what comes afterwards, helping families continue paying for everyday life.
That includes keeping children in school, maintaining a home, covering monthly expenses or protecting future opportunities.
“Together, they tell a much bigger story: one provides support in the immediate moment of loss. The other provides stability for the life that continues beyond it,” said Capitec.
Deepesh Desai, CEO of Capitec Life, said that the industry needs to change how it talks about products, services and payouts.
“Our industry is good at talking about insurance products, but not nearly good enough at talking about the people whose needs these products were developed to protect,” said Desai.
“Choosing cover isn’t simply a financial decision. It’s one of the most meaningful promises we can make to the people we love – that even if we’re no longer here, they’ll still be protected.”
He added that when people understand their cover, they make better choices, and those who depend on them are properly protected.
Capitec goes big on insurance
While primarily a bank, Capitec has been stepping up its game in the insurance market over the last decade.
In 2026, they entered into a third-party cell captive arrangement with Credit Life Insurance. In 2017, it launched funeral cover to help scale more affordable premiums.
In October 2022, Capitec Life was granted a Life Insurance licence and began consolidating the insurance business into Capitec Life.
As of May 2023, Credit Life Insurance has been offered directly through Capitec Life.
During the 2026 financial year, the Credit Life Insurance book in the cell captive was transferred from Guardrisk to Capitec Life via a section 50 transfer.
The group then began offering a simplified life cover product designed around client needs, introducing a streamlined sales process.
This sales process had flexible payout options, no medical requirements and no annual premium escalation.
“This improved accessibility and affordability while providing a personalised experience for clients traditionally excluded from life insurance,” the group said.
Moreover, in 2024, the group’s funeral reinsurance arrangement with Sanlam was terminated, with all new funeral policies issued via Capitec Life, while
Capitec Life will then take over the full administration of the Funeral Cover in-force policies following a large-scale system and data migration. Capitec paid Sanlam R1.9 billion to end the arrangement.
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