I don’t think that it’s the case that these products is not offered in other countries - it’s just that their markets are often much smaller compared to ours. But the question is: why are critical illness and lump sum disability so popular in SA?
Think about one of the fundamental reasons why (life) insurers offer products in general - it’s either because (a) government doesn’t offer as part of a social security programme or (b) government does offer them but their perceived value is low. In SA, I’m not sure about critical illness, but disability benefits paid by government are very small in size (compared to salary). Now this would be far from ideal if say, your salary was R30,000 and the disability benefit from government was R1,600! Hence, this is why people then turn to the private sector - they are in a position to devise better offerings (for a premium, of course).
Now, a question for you. What do you think will happen to insurers’ lump sum disability offering if government suddenly increases the size of its lump sum disability benefits?