2025 Health and Accident Insurance Benefit Escalations
Brought to you by SA Legal Academy: National Treasury and the Financial Sector Conduct Authority (FSCA) have announced the 2025 policy benefit escalations for health and accident insurance products.
In terms of the Demarcation Regulations issued under the Long-term Insurance Act, No. 52 of 1998 and the Short-term Insurance Act, No. 53 of 1998, the annual adjustment of benefit limits came into effect on 1 April 2025. These regulations, which have been in force since April 2017, specify which insurance policies are excluded from the Medical Schemes Act, No. 131 of 1998.
The 2025 escalations are determined by an automatic annual adjustment mechanism informed by the Consumer Price Index (CPI). This ensures that the maximum benefit amounts for products such as gap cover and primary healthcare insurance remain aligned with inflation. The adjustments apply to:
- Health insurance policies providing limited medical cover;
- Accident and health policies regulated under the insurance acts; and
- Products specifically demarcated as insurance rather than medical scheme business.
What this means for you, your business, or your clients
- For yourself: No direct individual obligations; impact is channelled through professional advisory duties regarding policy limits and coverage adequacy for clients.
- For your business: Compliance officers and product managers must ensure that policy schedules, disclosure documents, and internal systems are updated to reflect the higher benefit caps effective 1 April 2025.
- For your clients: Policyholders of gap cover and hospital indemnity products will benefit from increased maximum payout limits, providing greater protection against medical expense shortfalls in line with CPI.
Originally published at https://legalacademy.co.za/news/read/health-and-accident-insurance-2025-benefit-escalations-published