Discovery Life has unveiled a dramatic increase in its Dollar Life Plan premiums, which have experienced an average annual growth of 20% over the past five years. This growth underscores a significant shift toward offshore life insurance among customers.
Gareth Friedlander, Deputy CEO of Discovery Life, attributes this trend to heightened awareness driven by financial advisors. “Our advisors have been instrumental in showcasing the benefits of offshore life insurance, leading to substantial gains for clients who have embraced this option,” Friedlander said.
The primary factor behind the Dollar Life Plan’s growth is the US dollar’s 68% appreciation against the South African rand over the last decade. Friedlander noted that a client who had invested equally in local life insurance and the Dollar Life Plan ten years ago would now have 35% more coverage under the Dollar Life Plan.
However, Friedlander advised against solely relying on dollar-based life insurance. “The rand has depreciated relative to the dollar over the past decade, but this trend could reverse,” he cautioned. “Diversification remains the best strategy.”
Currently, 63% of Dollar Life Plan clients maintain a mix of rand-based and dollar-based insurance, reflecting a balanced approach to risk management.
In addition to diversification, Dollar Life Plan clients benefit from access to global services and opportunities. Coverage extends to severe illnesses requiring expensive procedures abroad, support for children studying overseas, and liabilities related to international business operations or property ownership.
The Dollar Life Plan is designed to be accessible, with minimum premiums starting at $50 (approximately R900) and an average premium of around R1,750. Friedlander highlighted the Exchange Rate Protector feature, which allows clients to lock in payments at a rand rate, facilitating easier budget management. “Our affordable, dollar-denominated insurance helps clients secure their future responsibilities and aspirations,” Friedlander concluded.
