{"id":866861,"date":"2026-08-03T06:59:14","date_gmt":"2026-08-03T04:59:14","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=866861"},"modified":"2026-08-03T06:59:14","modified_gmt":"2026-08-03T04:59:14","slug":"capitec-sounds-the-alarm-over-r50-4-trillion-gap-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/866861\/capitec-sounds-the-alarm-over-r50-4-trillion-gap-in-south-africa\/","title":{"rendered":"Capitec sounds the alarm over R50.4 trillion gap in South Africa"},"content":{"rendered":"\n

Capitec says South Africans are overinsured when it comes to funeral insurance, with many families neglecting to buy life insurance. <\/p>\n\n\n\n

South Africa’s largest bank by customers said that there is a massive disconnect between life and funeral cover.<\/p>\n\n\n\n

A 2025 Insurance Gap Study<\/a> released by the Association for Savings and Investment South Africa found that South Africa\u2019s life and disability insurance gap has widened to R50.4 trillion. <\/p>\n\n\n\n

The average South African income earner has a shortfall of around R3.1 million in death and disability cover. <\/p>\n\n\n\n

After the death of a breadwinner, the average household would have to cut spending by 34%, about R7,400 every month, to stay afloat.<\/p>\n\n\n\n

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. <\/p>\n\n\n\n

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.<\/strong><\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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. <\/p>\n\n\n\n

That includes keeping children in school, maintaining a home, covering monthly expenses or protecting future opportunities.<\/p>\n\n\n\n

“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.<\/p>\n\n\n\n

Deepesh Desai, CEO of Capitec Life, said that the industry needs to change how it talks about products, services and payouts. <\/p>\n\n\n\n

\u201cOur 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,\u201d said Desai. <\/p>\n\n\n\n

\u201cChoosing cover isn\u2019t simply a financial decision. It\u2019s one of the most meaningful promises we can make to the people we love \u2013 that even if we\u2019re no longer here, they\u2019ll still be protected.\u201d<\/p>\n\n\n\n

He added that when people understand their cover, they make better choices, and those who depend on them are properly protected. <\/p>\n\n\n\n

Capitec goes big on insurance <\/h2>\n\n\n
\n
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While primarily a bank, Capitec has been stepping up its game in the insurance market over the last decade. <\/p>\n\n\n\n

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. <\/p>\n\n\n\n

In October 2022, Capitec Life was granted a Life Insurance licence and began consolidating the insurance business into Capitec Life.<\/p>\n\n\n\n

As of May 2023, Credit Life Insurance has been offered directly through Capitec Life. <\/p>\n\n\n\n

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.<\/p>\n\n\n\n

The group then began offering a simplified life cover product designed around client needs, introducing a streamlined sales process.<\/p>\n\n\n\n

This sales process had flexible payout options, no medical requirements and no annual premium escalation.<\/p>\n\n\n\n

“This improved accessibility and affordability while providing a personalised experience for clients traditionally excluded from life insurance,” the group said. <\/p>\n\n\n\n

Moreover, in 2024, the group’s funeral reinsurance arrangement with Sanlam was terminated, with all new funeral policies issued via Capitec Life, while <\/p>\n\n\n\n

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. <\/p>\n","protected":false},"excerpt":{"rendered":"

Capitec says that South Africans often misunderstand the differences between life and funeral cover. <\/p>\n","protected":false},"author":95,"featured_media":859362,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2084142227584897467","_sma_facebook_post_id":"191437357620492_2165174540969612","_sma_instagram_post_id":"17902329255507436","_sma_x_attempts":1,"footnotes":""},"categories":[961],"tags":[1798,2880],"class_list":["post-866861","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-capitec","tag-sanlam"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/866861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=866861"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/866861\/revisions"}],"predecessor-version":[{"id":866891,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/866861\/revisions\/866891"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/859362"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=866861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=866861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=866861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}