2025 Insurance Policy Benefit Updates Under Demarcation Regulations

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The Minister of Finance has just approved the annual inflation-linked increases for certain health and accident insurance benefits under the Demarcation Regulations. These updates apply from 1 April 2025, based on a 4.4% inflation rate.

What Are the Demarcation Regulations?

They draw the line between what’s covered under:

• The Medical Schemes Act (regulated medical aids)

• And what’s allowed under short- and long-term insurance policies (like accident and health cover)

This means certain insurance products—although medical in nature—are governed by insurance law, not medical scheme rules.

What’s Changing in 2025?

Each year, benefit limits under qualifying insurance policies are adjusted for inflation. Here's the simplified takeaway:

• Short-term insurance (STIA) products (like accident cover) and

• Long-term insurance (LTIA) products (like health cover)

…have new maximum payout limits, updated using the CPI of 4.4%.

Examples of Updated Limits (as of 1 April 2025):

• The maximum daily benefit allowed under short-term insurance policies (STIA) has increased to R4,396.91, while the maximum lump sum payout is now R29,312.74.

• For long-term insurance policies (LTIA), the updated daily benefit cap is R4,396.50, with the same maximum lump sum of R29,312.74.

Smaller limits for certain sub-benefits (like per-day or per-event payouts) have also gone up slightly.

Why This Matters for Accountants

Then these escalation figures must be applied from April 2025 when reporting, calculating benefits, or drafting new contracts if a business:

• Offers or advises on these insurance products

• Is in compliance, healthcare, or benefits advisory roles

• Works with payrolls or tax where benefit limits matter.

Where to Get More Info

Read the Media Statement on the National Treasury’s website.

The full updated tables are in:

• Annexure A (Long-term policies)

• Annexure B (Short-term policies)