New risk policies may exclude Covid-19 claims
Dirk Groenewald, a Certified Financial Planner professional responsible for client care at the Vulintaba Association, reported on LinkedIn: “We have just had our first case of a client having Covid-19 as an exclusion on his new risk contract. “Replacing any risk contract has now become very risky for any financial planner.”
The exclusion was for Covid-19 contracted as a consequence of overseas travel, but Groenewald says it is possible that exclusions will begin to apply to the disease contracted through community transmission within South Africa.
“I also see (insurers) excluding it, regardless of travel. The bottom line is a financial planner recommending a replacement policy now is taking a big risk and putting their clients under even more risk,” he said.
If you are considering taking out a new life or disability policy at this time, be extra vigilant when reading the terms and conditions before signing on the dotted line.
Joining a medical scheme
If you are not a member of a medical scheme at present, you may be considering joining one to cover yourself and your family in the event of Covid-19 infection.
By law you cannot be refused membership of an open medical scheme; however, schemes can impose restrictions and/or penalties to mitigate their risks. In the absence of these restrictions and penalties, people could join and leave medical schemes at whim, when they felt the need for cover or not. This would place a far heavier burden on the membership of a scheme as a whole, and would make contributions unaffordable.
There are two ways medical schemes are permitted to counter this practice, which is known as anti-selection. They can impose “late-joiner” penalties on people who have not belonged to a medical scheme before or who have let more than three months pass between leaving one scheme and joining another; and they can impose a “waiting period”, during which you may not claim.
Read More: Joining a medical scheme in a crisis