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What you need to know about serious illness cover

What is serious illness cover?

Serious illness cover is a life insurance policy designed to pay you a lump sum if you’re diagnosed with a specific serious illness. The policy you choose will clearly state which illnesses are covered and the terms and conditions to process a pay-out. Illnesses include cancer, stroke and heart attack. Some policies will also pay out claims if you need to undergo open-heart surgery.

When you consider critical illness cover, please note that these policies usually include a ‘survival period’, which stipulates the minimum number of days you need to survive (calculated from the first diagnosis of the illness). The ‘survival period’ varies from 14 to 28 days (depending on the specific cover and illness).

Suppose you’re diagnosed with a severe illness, and your policy pays out your claim. In that case, you can use the money as you please – pay off your bond or car, go on holiday with your family while you recuperate, pay for the additional medical bills that your medical aid doesn’t cover, or hire a home nurse.

The amount of cover you qualify for is based on various factors, including gender, age, lifestyle habits, income, education level, and health status. Our actuaries use this information to calculate monthly premiums specific to the cover you’ve chosen.

You’ll pay lower premiums if your risk profile improves. All you need to do is make significant lifestyle changes (stop smoking or lose a substantial amount of weight). Get in touch with us and we’ll take you through the process.

Summary

  • Serious illness cover pays out a cash lump sum if you’re diagnosed with a severe condition.
  • Usually, you can use this lump sum as you please.
  • Your policy will specify which illnesses are covered and which ones are not.

Why do I need serious illness cover?

There’s a misconception that if you have comprehensive medical aid and salary protection, you can survive the financial implications that a serious illness brings. It couldn’t be further from the truth because treatment and medical procedures for severe conditions, like cancer, run into hundreds of thousands of rand (and in some cases millions). You should consider the following:

  • Advances in medical technology will continue to increase our lifespan, and if you’ve survived a serious illness, there’s a greater chance of you suffering a relapse.
  • Medical schemes are unlikely to cover all the expenses for serious illnesses, especially the cost of treatment for chronic conditions.
  • A lump sum pay-out for serious illness cover can alleviate some of your medical costs for specialist consultations, treatments, and medical procedures.
  • If you can’t work anymore due to a serious illness (e.g.  you suffer a stroke), you can use your lump sum pay-out and supplement your lost earnings to ensure that your family can maintain the same standard of living.
  • Once you’ve been diagnosed with a serious illness, it becomes increasingly difficult and expensive to get serious illness cover. It’s best to get serious illness cover as insurance against contracting a serious condition because your premiums will be lower and your pay out higher than if you get serious illness cover after you’ve been diagnosed.

How do you know if your cover is enough?

You need to ask several questions: How will your family be affected if you are diagnosed with a serious illness? How likely are you to return to work? Do you have to pay for long-term treatments and procedures, or medication? You need to consider the associated costs before you come up with an estimate.

Genetics also plays a crucial role in determining if you’re at risk of getting cancer, suffering a heart attack, or stroke.

You must take all of this into account and choose the most comprehensive cover for your specific circumstances. 

Remember to re-evaluate the value of your serious illness cover as you grow older to ensure that it is still in line with your lifestyle needs. It is always a good idea to increase the value of your cover to keep up with rising medical costs.

If you’d like to know more about serious illness cover from our direct life insurance services, get a quote or request a customer service agent to call you back.