How to compare insurers’ cancer benefits
The “hidden costs” can add up as well - for example, costs associated with lifestyle changes, employing a carer for you and your children and transport to and from treatment.
This is where a cancer benefit can play a big role in helping to ease financial distress. It is important to choose the right benefit for you. Comparing “apples with apples” isn’t always easy, so consulting a trusted intermediary is the best starting point.
Nonkululeko Zungu, product support consultant for Sanlam Individual Life, says cancer benefits cover different types of cancers. The types of cancers covered differ between insurers. Also, different benefits may pay out different percentages of the cover amount depending on the severity (stage) of cancer. Hence, you need to consider the types of cancers covered, as well as the percentage of the cover amount paid for the severity levels.
There’s no one-size-fits-all answer. It depends on you, your budget, your family history with cancer and other factors.
Here, Zungu outlines a few considerations when doing the comparison:
1. Consider the conditions covered and how well they are covered. One means of comparison is to compare the percentage of the cover amount paid for different severity levels of cancer. Insurers disclose their payout percentages under the disclosure grid in the Standardised Critical Illness Definitions Project (Scidep) issued by the Association for Savings and Investment South Africa.
The Scidep disclosure grid lists severity levels, from most severe to least severe, and the insurer specifies the percentage of the cover amount it will pay under the different levels. The definitions of the severity levels as disclosed under the Scidep grid are standardised across the industry, so are comparable between different products.
The better benefits tailor the percentage payout not only to the severity (stage) of the cancer, but also its likely impact on a person’s. For example, it pays 100percent for certain aggressive cancers in their early stages, even if the more affordable benefit option is selected. For other insurers, selecting a more affordable option usually results in smaller payouts for lesser severity cancers - even for aggressive cancers such as liver cancer where the prognosis is typically poor and the impact on the lifestyle is severe.
To avoid having long lists of specific types of cancers that are covered, while still giving the client peace of mind, some insurers include a catch-all claim event. When a cancer benefit provides cover for a catch-all claim event, cover is typically extended to cancers that may not be specifically listed as a claim event, but are severe enough to affect your quality of life.
The guidelines to determine the level of severity when assessing a claim under the catch-all claim event will be disclosed in the policy documents.
The more comprehensive benefits include cover for additional cancer events that are not included in the Scidep cancer definitions. Examples are those that offer cover for certain early cancers.
2. Look at price. Consider what you’ll pay as an initial premium, and what the premiums may be later.
Lower initial premiums may come with higher premium increases later. Also factor in whether the premiums or any compulsory annual premium increases will remain the same and for how long these will remain unchanged.
If you qualify for a discount, will you continue to have the discount if your circumstances change (for example, if you stop going to the gym or cancel your other policies with the same insurer)? If not, by how much will the premium increase?
* Level of underwriting. The level of underwriting (health questionnaires, blood and other tests) impacts the premium. Often, the more underwriting required, the lower the premium.
* Exclusions. There may be certain conditions or circumstances under which the benefit will not pay out. These can be general exclusions (applicable to the specific cancer benefit), as well as exclusions specific to you and your medical history.
* Any waiting periods. You may need to wait for a certain period, after taking out the benefit, before you can qualify to claim under it.