Severe illness cover protects you and your family against the financial impact of a major illness like cancer, a heart condition or stroke. Such a 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, such as 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 scheme may pay for medical expenses while you are in hospital, and for the medical professionals you consult, you may still incur significant additional expenses out of your pocket. These additional costs may be very high, especially if you require the latest treatment for your condition, which your medical scheme may not approve or may pay only in part.
Non-medical expenses such as long-term home nursing and time off work are unlikely to be covered by your medical scheme. It is not unreasonable to expect to incur more than a million rands in medical and non-medical expenses if you suffer a major illness.
EMPloyers don’t cover it all
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 schemes 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 for females in their twenties and thirties.
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 100000 people worldwide, but there is no cure. It can cost millions of rands to manage.
You should also consider cover that pays out from as early as stage 0, or very-early-stage cancer. Early diagnosis and treatment of cancer, especially more common forms, such as breast cancer, is key.
Research from the American National Cancer Institute reveals the survival rate of breast cancer patients diagnosed and treated while in stage 0 is almost 100% over five years, but this survival rate drops significantly to about 22% by stage four.
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.
There are instances 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. This financial pressure may make it tough to maintain monthly life cover premiums. South Africans who take responsibility for their own wellness and the wellbeing of their families incorporate severe illness cover in their risk 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 must shop around and find cover that suits you, to ensure you and your family are protected in the long term.
Sinenhlanhla Nzama is the head product actuary for Investec Life.