Category Archives: Critical Illness

Medical Aid vs Dread Disease Cover

If you are paying for both Medical Cover and Dread Disease Cover… you may ask yourself why?

The cost of living keeps rising and in the year ahead we can expect more increases that will put pressure on our hard-earned and diligently saved resources. This doesn’t have to be bad news – it can encourage us to improve and tailor our financial planning to meet the changes and test our flexibility! That means going back to your costs and determining what is necessary and what is not.

When it comes to your financial planning portfolio – you might see that you have Medical Aid and you have Dread Disease cover (also known as critical illness insurance) and feel like having the two is an over-spend.

The reality is: it’s not. Because they are not the same type of product.

In short – you can loosely view it like this: medical plans cover the direct medical costs of your illness (hospital, doctors and
treatments) whilst dread disease/severe illness cover assists with everything outside of the traditional medical sphere (extra
medications that aren’t covered, extra specialist visits, alternate dietary needs, medical equipment, car modifications to cars, time off work etc).

In short – they are complementary products.

Another quick point to consider is that the younger you are when you take on cover like this, the lower your premiums are. Age of commencement and time covered play a role when your premiums are calculated. General practice advises to start with a small amount of cover and build it up with time, this way it allows you to work towards the levels of cover you would prefer. But everyone is unique, so it’s best for us to chat about it first!

Cancer claims reveal risk trends

Recent statistics made available by Liberty Life reveal that cancer is the leading cause of claims paid by the assurer in 2015. One in four claims paid by Liberty were for cancer, and the proportion of claims for cancer is increasing, even at younger ages.

Motor vehicle accidents are typically cited as the reason that young people need disability or income protection cover, but cancer was a greater cause accounting for 12.3% of claims (motor vehicles accounted for 11.9%). Even more worrying is the fact that in young parents, cancer was the cause for claim for 22.5%.

These statistics are for claims on policies that provide cover for death, disability or dread disease (illnesses such as cancer, strokes and heart attacks). The fact that many people now survive cancer means that most of the claims were paid as a result of severe illness and not as a result of the life assured dying.

Liberty’s claims-payments for severe illness cover increased by 50% from 2014 to 2015. This was not only due to the fact that more people are taking out this cover, but also because of the growth of awareness and early detection of cancer.

Liberty was not alone in their findings. Sanlam’s claims-statistics for 2015 show that 60% of its dread-disease claims were for cancer. At Momentum, 34% of its dread-disease claims were for cancer. At Discovery they were 38%. And at Old Mutual, 57%

An interesting statistic put out by Old Mutual with its claims figures is that 60% of all claims were for people under 45.

You may ask yourself why, if you already have medical scheme cover and loss-of-income cover, do you also need severe illness cover for cancer?

A medical scheme offers crucial cover that you shouldn’t be without. The problem is that cancer treatments are expensive and schemes have rules about what they do and do not pay for. Sometimes a doctor will recommend the best treatment available but a scheme only pays for a more modest treatment or there is a diagnosis of a rare form of cancer that requires specialised treatment.

These statistics show that cancer is still a widespread affliction, even at younger ages. While cancer claims are obviously higher among older age groups, even 20- and 30- somethings should be prudent when it comes to taking out risk policies.

If you have any questions or want to review your policies then give me a call and let’s meet up.

Source: iol