Severe Illness Cover – It’s a matter of life not death

Sinenhlanhla Nzama

Head product actuary for Investec Life

South Africans tend to neglect severe illness cover when constructing a protection portfolio and this is threatening the long-term wellbeing of most families.

Severe illness cover is personal insurance that protects you and your family against the financial impact of a major illness like cancer, a heart condition or stroke. Such financial impact may include the costs of recuperation and funding for a change in lifestyle, both of which are essential for optimal recovery from a major illness.

 

Major financial costs 

Major illnesses like a heart condition (for example, heart attack), cancer and stroke account for more than 80% of severe illness insurance claims in South Africa. 

Even though your medical aid may pay for medical expenses while you are in hospital and for the medical professionals you consult, you may still incur a significant amount of additional medical expenses out of your pocket. These additional costs are very high especially if you require the latest treatment for your condition, which your medical aid may not approve or may pay only in part.

Non-medical expenses like long-term home nursing and time off work are also unlikely to be covered by your medical aid. It is not unreasonable to expect to incur more than a million rand in medical and non-medical expenses if you suffer some of the major illnesses. 


What your employer doesn’t cover

Working South Africans tend to rely heavily on their employer or retirement fund for basic life cover. Unfortunately, this cover does not usually include severe illness cover. To be prudent and sufficiently protected, you should obtain severe illness cover in your individual capacity.

However, not enough people are doing this. Perhaps due to the misconception that you only need severe illness cover later in life, or a belief that medical aid will cover all the costs of a major illness. In reality, a major illness can affect people of all ages. Globally, the instances of cancer are on the rise, especially females in their twenties and thirties.

Rare yet major illnesses such as epilepsy, chronic liver disease, total colectomy, acute and chronic renal failure can affect anybody, regardless of age. 


Consider recurring conditions

It’s not unheard of to suffer more than one heart attack or to be diagnosed with multiple cancers over time. This means it’s important that you are not left uninsured after successfully beating a major illness because you have exhausted your severe illness cover. You must ensure you have an enhanced level of cover that will allow you to claim more than once.

Due to its high prevalence and possible multiple claims, cancer remains the leading cause of severe illness claims by far. It accounts for 60% of claims by women, according to the Association for Savings & Investments South Africa (ASISA).  

Stroke and heart conditions are also very common in South Africa, regardless of gender. That being said, you should not ignore less common conditions that are costly to treat. Motor neuron disease, for example, is rare, with only two cases per 100 000 people worldwide, but there is no cure. It can cost millions of rands to manage.


Early-stage cancers

You should also consider cover that pays out from as early as stage 0 for cancers, which are the very early-stage cancers. Early diagnosis and treatment of cancers, especially more common cancers like breast cancer, is key. 

Research from the American National Cancer Institute reveals that the survival rate of breast cancer patients who are diagnosed and treated while in stage 0 is near 100% over five years, but this survival rate drops significantly to about 22% by stage four. 

This reiterates the utmost importance of early diagnosis with appropriate treatment.


It’s a matter of life, not death

Traditionally, most South Africans are sold life cover as the first cover they need, to protect their families. That could be a valid approach, but not for everyone and certainly not at every life stage. 

There are times when severe illness cover could be more important than life cover. Furthermore, leaving yourself under-insured due to a lack of severe illness cover can lead to financial hardship for your family while you are still alive. In some instances, this financial pressure makes it tough to maintain the monthly payment of life cover premiums.

South Africans who take responsibility for their own wellness and the wellbeing of their families incorporate severe illness cover in their protection portfolio. More importantly, they consider cover that automatically includes their children.

The risks of being uninsured for a major illness are too high to ignore. You have to shop around and find cover that suits you, to ensure you and your family are protected in the long term. 

 

Investec Life Limited is an authorised Financial Services Provider 47702.

Investec Life will collaborate with you at each life stage to ensure that your cover evolves with you as your personal needs change. For more information, simply visit investec.com/life

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