1Life Direct: Direct Life Insurance

1Life Direct: Direct Life Insurance - 1Life, 1Family, 1Policy

CONSUMERS ARE BEING RIPPED OFF BY LIFE INSURANCE COMPANIES

It is the dawning of a new era in the Life Insurance industry. At a time when the

industry is trying to come to grips with the growing loss of public confidence in its

products, a new player has been launched and is set to shake-up and

revolutionise the market.

1Life Direct, South Africa’s first direct life insurance provider, was launched this

month with ambitious plans on effecting a much-needed change in this volatile

industry. Lenerd Louw, CEO of 1Life Direct explains: “Consumers are being

exploited by brokers who are selling them surplus and complicated life insurance

products to benefit their own pockets. The aim of life insurance is to cover debt

and provide for dependants when you die - not to enrich the broker. Consumers

deserve proper advice that is not based on commission structures. They

deserve a choice, an alternative option. And that’s where 1Life Direct comes in.”

“In 2004, the life component of the R70 billion long-term insurance industry was

worth R10 billion in premium income and constituted 2.3 million policyholders.

As for the future, we predict that by 2008, the life industry will be worth R11.5

billion and have 2.7 million policyholders. 1Life Direct aims to capture 5% of this

market by 2008 with a premium income of over R500 million per year. We are

confident that by the year 2010, 1Life Direct will be a significant player in the

market,” says Louw.

1Life Direct is 100% owned by Budget Holdings Limited (BHL), a multinational

company based in Europe. The company is a fully direct operation and

therefore can keep overheads down to a minimum, has lower infrastructure fees

and no broker commissions, and can rebate commission usually paid to brokers

back to the consumer. “Brokers earn ongoing commission, receiving monthly

administration fee payments as well. These payments are made to the broker for

the lifetime of the policy, and in some cases, paid upfront. Because the direct

insurer does not incur these costs, the savings can be passed on to the client.

For example, with 1Life Direct, a 30 year old female could get R1-million worth of

cover for as little as R89 per month*. What’s more, clients can get covered within

20 minutes without needing a medical examination,” says Louw.

“Our pricing structure will be particularly beneficial for the emerging market as

according to a study which was carried out on behalf of the FinMark Trust,

eighty-seven percent of South African adults do not have any life cover and the

main reason for this is lack of affordability. From a price perspective, direct life

insurance allows the consumer to save up to 22.5% on broker commissions. In

addition, brokers also charge administration and documentation fees and in

some cases, a contribution to marketing costs. This, together with the broker

commission means that up to a third of the consumers monthly insurance

payment can go to a broker or middleman,” says Louw.

“With all the negative publicity surrounding established insurance companies, I

am quite certain that the South African consumer market will react to this offering

with a sense of relief. No under performing endowments, no excessive broker

commissions and no over selling, will certainly go a long way in offering

customers a life insurance offering that they can trust and feel confident in,”

comments Louw.

1Life Direct will offer cover from R50 000 to R5-million, depending on individual

requirements. 1Life Direct’s portfolio of life insurance solutions includes two types

of cover: Pure Life Cover and Credit Life Cover. With Pure Life Cover, the

clients beneficiaries will receive the value of the life insurance policy after the

clients death. Credit Life Cover will take care of any outstanding debt the client

may leave behind, such as a bond or vehicle finance agreement. Credit Life

Cover includes free Disability and Dread Disease Benefits which would provide

cover in the case of disability or the diagnosis of a dread disease. Credit Life

also includes a Retrenchment Benefit, whereby if the client is retrenched, 1Life

Direct will pay their finance installments for up to six-months to give them time to

find a new job. In addition, with Credit Life policies, clients will only have to pay

for 80% of the term years for policies of five years or more. For example, with a

Credit Life policy of 20 years, the client will only have to pay premiums for 16

years.

"1Life Direct clients will also receive the following additional benefits at no extra

cost : Expo-Sure, which ensures clients have access to confidential testing and

treatment within the critical 72 hour window period after potential accidental

exposure to HIV, thereby greatly reducing the possibility of becoming HIV

positive. The Pure Life Terminal Accelerator Benefit , which allows the

terminally ill client to receive their life cover while they are still alive. The

1Life Direct Disability and Dread Disease Product, which allows clients to

receive a lump sum payment in the case of disability or diagnoses of Dread

Disease. Furthermore, on payment for disability, 1Life Direct will waive the

clients monthly life insurance premiums for a period of up to five years. The

Guaranteed Assurability benefit offers the client the ability to purchase an extra

25% of cover every three years - no questions asked. This is to ensure that the

amount covered remains in line with the rate of inflation,” says Louw.

What’s more, 1Life Direct’s policy books have been stripped of the legal jargon

and has obtained the Readability Mark by Plain Business Writing Organisation.

Keeping in line with the plain and simple theme, clients will also be able to

interact with the call centre consultants in several of South Africa’s official

languages.

Louw continues: “With 1Life Direct we are offering consumers the opportunity to

take control of their own financial matters, instead of having to entrust them to

somebody else. Our model will undoubtedly set the cat among the pigeons as

no-one wants to spend more than they have to on life insurance cover.”

For more information on 1Life Direct and its services, please call

0860 10 53 30 or visit the website at http://www.1lifedirect.biz.

*Terms and Conditions Apply

1Life Direct | Hospital Plan | Life Insurance