The case for severe illness cover

Being diagnosed with a serious illness is a major traumatic event. The last thing you need is to worry about finances at a time like this.

If you are fortunate to have a medical aid, there are often expenses that aren’t covered in full, depending on the medical aid plan you have. Treatment for a severe illness is expensive. Most medical aid plans limit the total amount you can claim in a particular year or for certain treatments or tests.

It is important to note that severe illness cover is not a substitute for a medical aid plan or medical aid gap cover. It is a supportive contributor for large or unforeseen expenses. Travel and accommodation expenses are examples of expenses that is not covered by a medical aid plan.

Other smaller expenses add up. A hospital coffee shop may become your family’s favourite restaurant. Flowers aren’t cheap either. Sound financial management to cut back on a birthday gift suddenly evaporates. A weekend getaway becomes more important than before.


Severe Illness Cover is expensive?

If you do the math, the cover comes at a very low cost. Your budget may suggest otherwise, but will you sign indemnity for one million Rand in exchange for R420 per month?

The above is based on a recent quote for a female admin manager, non-smoker, age 37, matric and income of R15000 per month. After 10 years the aggregate of all contributions amount to less than R65000, considering an annual contribution increase of 5%. Premiums are determined personal attributes, including age, highest qualification, smoker status and income. Note that quotes will differ form one insurer to the next.


The risk of attracting a severe illness. How lucky do you need to be?

Some sources estimate that roughly 1 in 4 people attract a severe illness during their lifetime. This cannot be confirmed and is difficult to substantiate due to poor record keeping in some countries.

According to Sanlam’s claim statistics for 2020, 62% of all severe illness claims paid where for cancer & tumours and 20% were for direct cardiovascular diseases.

While this indicate a higher probability of claiming for cancer, the good news is that cancer makes a minor contribution to the 2019 WHO report for causes of death. The major cause of death being cardiovascular conditions.


Diseases covered

Diseases related to cardiovascular conditions and cancer are synonymous with severe illness cover. Basic or core cover options covers a limited number of claim events. The main conditions covered are heart attack, stroke, coronary artery bypass graft & cancer.

The scope of diseases that are covered under comprehensive severe illness is extensive. Examples are kidney related conditions, conditions associated with liver function, respiratory illnesses, dementia, parkinson’s and alzheimer’s disease, arthritis, MS and sensory diseases. The list of claim events is endless.


Qualifying criteria

Usually, multiple claim events are allowed provided they are not related, unless stipulated otherwise. This means you may be able to claim more than once even if you only have one severe illness benefit listed.

Individuals can elect to buy severity-based cover or maximum cover. The latter covers 100% of the insured amount for major illnesses and severity-based cover indemnifies the insured based on a sliding scale in terms of the severity of the condition.


Last thought

Individuals with existing health conditions are more at risk depending on the specific condition diagnosed with or treated for. Some diseases are hereditary and could indicate a higher probability of contracting a similar or related disease.

Having said that, the diagnosis of a serious illness is seldom expected and mostly unforeseen.

Severe illness cover makes up an important part of your personal risk insurance portfolio. Several factors will lead the way to an appropriate solution. Personal attributes have a large effect on the type of cover selected. One size does not fit all.

The contribution towards severe illness cover remains a financial commitment and hopefully one you will never need. Unfortunately, it’s not always “someone else”.

Please contact BVSA PE should you require any assistance: 041 365 5700 | pe@bvsa.ltd.














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