Credit Life Assurance – A Reality Check
A recent report published by www.farmingportal.co.za reported that the average South African farmer is 62 years old. The same report indicated that the number of farmers declined from about 128,000 commercial farmers in the 1980’s to about 30,000 farmers in 2014.
In January 2016 Fin24 reported that farmers have their highest-ever debt of more than R125bn with South African banks at a time when a drought, caused by the lowest rainfall on record, is withering maize fields and discouraging the planting of crops. Although we were blessed with some rain, the South African agricultural sector is certainly not out of the woods yet.
In a scenario where the average age of farmers is high and our farmers have the highest level of debt in our history, it is astonishing to realize that the take-up of credit life assurance in the agricultural sector amongst commercial farmers have declined significantly. Raddix investigated this reality and to our amazement it became clear that the perception is still very live that credit life assurance is very expensive.
Raddix will launch a new credit life assurance product in collaboration with Landbank Insurance Company on 1 April 2017 for Suidwesfin (the credit division of Suidwes Landbou) which is certainly challenging the perception that credit life assurance is so expensive that famers are buying whole life assurance products and are ceding these policies as part of the surety that they provide to the financier.
Raddix will supply more on this particular subject in the first quarter of 2017.