The rate at which South Africans are defaulting on their life insurance policies has increased by 260 percent in the last six months, a financial comparison website reported on Wednesday.

The website Thinkmoney's general manger Mike Kann said the analysis was based on people who had taken up life insurance policies through their insurance partners.

He said the normal trend for defaulting over a two-year period was at a rate of 15 percent to 20 percent, but this had now increased to 40 percent.

"We are used to seeing a default rate of 15 percent to 20 percent in the first two years of a policy's existence but default rates are now closer to 40 percent. That is a staggering increase of 260 percent," Kann said.

He said it was not surprising that people would default on payments due to the current economic climate.

However he suggested that people should find more affordable policies instead of completely opting out of a policy.

Reassessing life insurance in South Africa was complex because of the large number of different policies available, said Kann.

Sapa