The independence illusion: Why young South Africans are financially exposed

By George Kolbe, Head of Marketing and Enablement at Momentum Life Insurance

Many young South Africans believe that financial protection is something you only need once you have children or other dependents. If nobody relies on you financially, the thinking goes, there is little worth protecting.

That belief leaves many professionals financially exposed at a time when they’re taking on some of their biggest financial commitments. According to the latest Association for Savings and Investment South Africa (ASISA) Insurance Gap Study, the country’s life and disability insurance gap has widened to R50,4 trillion, growing by 12.5% per annum since 2022. The value of life and disability cover is not keeping pace with rising incomes, leaving millions of South Africans underinsured.

The decision to put financial protection in place should not be determined by whether you are a parent or not. It should be determined by your financial responsibilities and your ability to maintain your financial wellbeing if life takes an unexpected turn. If your income pays your home loan, settles your debt, funds your lifestyle or supports the future you are building, then your financial wellbeing depends on your ability to continue earning an income. In many cases, you are your own most important dependent.

Risk does not wait

Risk does not wait until you’ve reached a certain age or stage of life. Delaying appropriate risk protection doesn’t reduce the likelihood of something going wrong; it simply increases the financial consequences if it does.

Whether through serious illness, injury, disability or death, any event that disrupts your ability to earn an income can place your financial wellbeing at risk.

While youth is typically associated with health and vitality, it does not, unfortunately, provide immunity from risk. Momentum Life Insurance’s 2025 claims statistics show that serious life events can occur at any age. In fact, 62% of death claims for clients under the age of 30 were not health related and resulted from unnatural causes, with motor vehicle accidents being the primary cause. Claims data also shows that the unexpected can happen early. The question is not necessarily whether someone else depends on you financially. It is whether your financial wellbeing depends on your ability to earn an income, meet your obligations and maintain your lifestyle. For most people, the answer is yes.

Building a complete protection strategy

Comprehensive financial protection is not about a single product or addressing a single risk. It is about building a layered risk strategy that protects both your financial obligations and ability to earn an income.

Life cover helps ensure that outstanding debts, home loans, and estate-related expenses can be settled if you pass away, preventing your financial obligations from becoming a burden to those you leave behind.

Protection for your earning potential is equally important. Your ability to earn an income over a 30-to-40-year career is likely to be your greatest financial asset. If a serious illness, injury or disability prevents you from working, disability cover, income protection, and critical illness cover can help protect your financial wellbeing and provide financial support when life throws you a curveball.

Depending on the nature and severity of the event, these benefits can provide a lump sum payout or an ongoing monthly income to help cover debt, living expenses and lifestyle adjustments while protecting your long-term financial security.

The value of a well-rounded protection strategy is evident in the claims data. In 2025, Momentum Life Insurance paid more than R1 billion in critical illness claims. Yet 87% of clients who passed away from cancer or cardiovascular conditions did not have critical illness cover in place with the insurer. This highlights a significant protection gap. Advancements in medicine mean people now survive major health events that may previously have been fatal. However, surviving such an event without adequate financial protection can have a lasting impact on long-term wellbeing.

Questions to ask yourself

Building financial resilience starts with proactive planning. Ask yourself the following questions:

1. If I died tomorrow, what would happen to my home loan or shared financial commitments?
2. If a serious illness or accident prevented me from working for 12 months, or longer, what source of income would pay my rent, levies, and daily living expenses?
3. If an illness, injury or disability meant that I could never work in my chosen profession again, how would I fund my future financial needs?
4. Would my current employee benefits fully replace my take-home salary, or would I face a significant shortfall?

The role of professional advice

Making these decisions in an environment of rising living costs can be challenging. This is where the guidance of a professional financial adviser becomes invaluable. A financial adviser does not view insurance as a grudge purchase. Rather, they view it as a tool for maintaining financial continuity and protecting long-term financial wellbeing. They can help build a tailored protection strategy that reflects your career stage, financial responsibilities and future goals, ensuring that you secure cover when your insurability is strongest and premiums are generally more affordable.

Financial protection is not only about protecting the people that depend on you. It is also about protecting the financial wellbeing you have worked hard to build.

If serious illness, injury or death disrupted your ability to earn an income tomorrow, would your financial future and that of your loved ones remain secure?

For many young South Africans, that is the most important question to answer.