Old Mutual and Absa are two of South Africa’s most trusted and long-established financial institutions. Both offer life insurance policies that cater to a wide range of people, from young professionals starting their careers to older individuals looking for long-term financial security.
Old Mutual’s Protect Life Cover focuses on providing comprehensive coverage that includes life, disability, impairment, and severe illness benefits. Absa’s Ultimate Protector and Instant Life policies, on the other hand, offer life, disability, and critical illness coverage with the flexibility to adjust premiums and coverage amounts easily.
This comparison will highlight the costs, benefits, pros and cons, as well as the suitability of each policy for different types of consumers.
Table: Comparison of Old Mutual Life Insurance and Absa Life Insurance
| Feature | Old Mutual Protect Life Cover | Absa Ultimate Protector & Instant Life |
|---|---|---|
| Payout | R100,000 to R30 million (varies by cover type) | R100,000 to R6 million (varies by cover type) |
| Coverage | Life, disability, impairment, severe illness | Life, disability, critical illness, terminal illness |
| Waiting Period | 30 days before first premium | None for Instant Life |
| Benefit Increase | No automatic increase | 5% annual benefit increase |
| Cashback | Cashback every 5 years | 20% cashback every 10 years |
| Premium Protection | Yes, premiums waived in case of disability, retrenchment, or death | No specific premium protection plan |
| Eligibility | 14 – 79 years for life cover; age restrictions for additional benefits | 18 – 64 years |
| Critical Illness Coverage | R100,000 to R6 million for severe illnesses | Up to R3 million for critical illness |
| Disability Coverage | R100,000 to R30 million for total permanent disability | Up to R4.5 million for work disability |
| Suicide Exclusion | No payout for suicide within the first two years | Yes, standard exclusion applies |
| Rewards | None | Cashback after six months for Absa digital banking customers |
Benefits of Old Mutual Life Insurance
- Comprehensive Coverage: Old Mutual covers life, disability, impairment, and severe illnesses. This comprehensive approach ensures financial protection across multiple health risks.
- Premium Protection: If the policyholder becomes disabled, retrenched, or dies, Old Mutual waives future premiums, ensuring continued coverage.
- Cashback Options: Old Mutual offers cashback every five years, providing long-term policyholders with a reward for their commitment.
- Flexibility: Policyholders can adjust premium and cover patterns to suit their changing financial needs.
- Optional Add-ons: Old Mutual offers a variety of optional benefits such as Cancer Enhancer and Child Illness Benefits to extend the scope of coverage.
Benefits of Absa Life Insurance
- Flexible Premiums: Absa’s policies allow policyholders to adjust their premiums and coverage online, making it easy to adapt to changing financial circumstances.
- No Waiting Period: The Instant Life policy has no waiting period, meaning coverage starts immediately after the first premium is paid.
- Cashback and Rewards: Absa offers 20% cashback every 10 years and provides additional rewards for digital banking customers, making it a great option for people who prefer an integrated financial ecosystem.
- Work Disability Insurance: Absa’s policies cover up to R4.5 million for work-related disabilities, offering peace of mind for employees in physically demanding jobs.
- High Customer Satisfaction: Rated number one in the 2021 SA Customer Satisfaction Index, Absa is known for its excellent customer service.
Requirements of Each Life Insurance Policy
- Old Mutual Protect Life Cover:
- Minimum age of 14 to apply.
- Life cover available to those under 79.
- Specific age limits for additional benefits: Disability Cover (under 59), Functional Impairment (under 64), Severe Illness (under 69).
- Suicide exclusion applies for the first two years.
- Absa Ultimate Protector and Instant Life:
- Applicants must be between 18 and 64 years old.
- For Absa Instant Life, there’s no medical exam required, making it accessible to a wider audience.
- For some critical illness benefits, medical underwriting may be required.
- Absa’s suicide exclusion also applies for the first two years.
Pros and Cons of Each Life Insurance Policy
Old Mutual Protect Life Cover
Pros:
- Comprehensive coverage for life, disability, and severe illnesses.
- Flexible premium and cover options.
- Offers additional coverage through optional benefits.
- Premium protection feature ensures continuation of coverage even during difficult times.
Cons:
- No automatic benefit increase.
- Higher premiums for additional coverage.
- Suicide exclusion applies for two years.
Absa Ultimate Protector & Instant Life
Pros:
- Flexible premiums that can be adjusted online.
- Immediate coverage with no waiting periods for Instant Life.
- Cashback rewards every 10 years.
- High customer satisfaction ratings and seamless digital experience.
Cons:
- No premium protection like Old Mutual.
- Coverage amount may be lower compared to Old Mutual.
- No options for premium waivers due to retrenchment or disability.
Who is Each Policy Suitable For?
- Old Mutual Protect Life Cover is suitable for individuals looking for extensive, long-term coverage that protects against multiple life risks like disability, impairment, and severe illnesses. It’s ideal for families and individuals who want comprehensive protection and are willing to invest in additional benefits for more coverage. It’s also a good option for people with complex health needs or those seeking large sums insured.
- Absa Ultimate Protector & Instant Life is best suited for those seeking flexible, simple, and accessible life insurance without complicated medical exams or waiting periods. It’s a perfect option for young professionals or individuals looking for affordable coverage that they can manage online. The added cashback rewards and seamless integration with Absa’s digital banking platform make it especially appealing to digitally savvy customers.
Additional Comparison Indicators
- Ease of Claim Process: Both companies offer streamlined claim processes. However, Absa’s Instant Life is renowned for its quick and simple claims system, while Old Mutual provides more comprehensive support for complex claims involving multiple benefits.
- Inflation Protection: Absa’s 5% annual benefit increase keeps up with inflation, which can be crucial for long-term financial planning. Old Mutual does not offer automatic benefit increases, meaning policyholders need to actively adjust their coverage to keep up with inflation.
- Customer Support: Absa ranks higher in customer satisfaction, offering a more user-friendly digital experience. Old Mutual has a wider range of branch-based services, which could be beneficial for clients who prefer face-to-face interactions.
Conclusion
When choosing between Old Mutual Life Insurance and Absa Life Insurance, the decision ultimately comes down to individual needs and preferences. Old Mutual offers comprehensive coverage with flexibility and optional add-ons for those who need more extensive protection. On the other hand, Absa provides more flexibility with a streamlined, affordable, and user-friendly experience, along with cash-back rewards.
For individuals or families seeking a full spectrum of coverage options, Old Mutual Protect Life Cover may be the better choice. However, for those prioritizing flexibility, easy premium management, and digital integration, Absa Life Insurance is a strong contender. Ultimately, both options provide strong life insurance coverage tailored to South African consumers.