With the cost of living continuing to rise, many South Africans are taking a closer look at their monthly expenses, and insurance premiums are often one of the first things people reconsider.
According to the Association for Savings and Investment South Africa (ASISA), millions of policies lapse every year, with many not making it beyond the first year. But in most cases, people don’t cancel their cover because they don’t value it. Often, life simply gets expensive, budgets get tighter, and the policy no longer fits their reality.
“For many people, lapsing a policy isn’t a deliberate choice; it’s often the result of cover that didn’t quite fit their reality to begin with,” says Michele Jennings, Chief Executive of glu insurance. “Sustainable insurance starts with honest conversations about affordability and needs. When cover is set up to work within someone’s life, rather than against it, it becomes far easier to maintain.”
Here are four common reasons insurance policies lapse, and a few simple ways to avoid it.
1. Missing a debit order
Sometimes a policy lapse starts with something small, like a missed debit order. Maybe your debit date goes off before payday, or your account balance is lower than expected that month. It happens, but if missed payments continue, your policy could eventually lapse.
It’s worth checking that your debit order date aligns with when your salary comes in and making sure your insurer has the correct contact details, so you don’t miss important notifications or reminders.
If you do miss a payment, don’t ignore it. The sooner you speak to your insurer or adviser, the better your chances of fixing the issue before your cover is affected.
2. Taking out cover that’s too expensive to maintain
It’s easy to think that more cover automatically means better protection, but a policy only works if you can realistically afford to keep paying for it month after month. Sometimes people sign up for cover that stretches their budget too tightly, only to struggle a few months later when expenses increase or life changes unexpectedly.
Instead of aiming for the “biggest” policy, focus on cover that fits comfortably into your budget long term. It’s also important to be open and honest with your adviser about what you can realistically afford. You should never feel pressured to commit to premiums higher than you can afford, even if that means taking out a lower level of cover than initially recommended. In many cases, some level of cover is far better than none at all, especially if it means avoiding a situation where your policy lapses completely. The goal is to find a balance that protects you while still being sustainable over the long term. A more affordable cover can still provide meaningful protection and peace of mind.
3. Not fully understanding what you’re signing up for
Insurance can feel complicated, and many people move through the process quickly without fully understanding the details of their policy.
You should never feel embarrassed to ask questions. It’s important to understand things like waiting periods, exclusions, premium increases, and exactly what your policy covers before committing.
If you leave the conversation still feeling confused, uncertain, or pressured to make a quick decision, that’s a sign to slow down and ask for clarity. Insurance should make you feel more secure, not more stressed.
4. Treating insurance like a once-off decision
Many people take out cover and then never look at it again. But life changes. Salaries shift, families grow, expenses increase, and priorities evolve over time. A policy that worked for you two years ago may not necessarily work for you today.
That’s why it’s important to review your cover regularly and check whether it still matches your needs and budget. If your premiums start feeling difficult to manage, speak to your adviser before cancelling altogether. In some cases, adjusting your cover could help you keep some protection in place without overwhelming your finances.
Ultimately, understanding your insurance is just as important as having it. If you haven’t reviewed your insurance recently, now is a good time to start. Pick one thing to check, whether that’s your debit order collection date, benefit summary, or simply whether your cover still fits your needs.
At the end of the day, the best insurance policy isn’t necessarily the most expensive one, it’s the one that you can maintain consistently and that will still be there for you when you need it most.
