ASISA: 60% of critical illness claims made by women due to cancer

13 June 2017 Hennie de Villiers, ASISA

Critical illnesses such as cancer and heart disease are alarmingly widespread among women in South Africa. In addition to the physical and emotional burden that comes with being diagnosed with a dread disease, many of these women may also face unexpected financial hardships as a result.

The latest figures from Statistics South Africa show that cerebrovascular disease (which causes strokes), hypertensive disease and other forms of heart disease all featured in the top five natural causes of death among women in 2015. In addition, some ASISA members report that more than 60% of critical illness claims made by women in 2016 were as a result of cancer.

According to Hennie de Villiers, deputy chair of the Association for Savings and Investment South Africa (ASISA) Life and Risk Board Committee, a severe illness diagnosis could easily tip you and your family over the financial edge.

“Developing a critical illness could mean that your family loses a breadwinner while you are receiving treatment. You could also face a range of additional expenses as a result of your treatment and during your recovery,” he says.

He therefore encourages women to consider safeguarding their financial future with critical illness cover.

Also known as severe illness or dread disease cover, critical illness insurance offers policyholders protection against the financial consequences of a critical illness or a traumatic medical event.

He adds that as a young and healthy woman, critical illness may be the last thing on your mind, but emphasises that financial protection is vital for women of all ages.

Statistics from some ASISA members show, for example, that of the critical illness claims made by women in 2016, nearly 11% was by women under the age of 35 years. Women between the ages of 36 and 45 years accounted for 31% of claims submitted by women.

“The payout from their critical illness cover would have provided these women with a financial lifeline in a time of need, providing a vital buffer against any loss of income and giving them the means to cope with additional healthcare expenses.”

The hidden cost of critical illness

De Villiers compares the financial risk of a critical illness to an iceberg hiding in the water.

“On the surface, a loss of income if you were unable to work would place an unexpected strain on your household’s finances. This would mean that you would need to cut back drastically on your living expenses or potentially neglect saving towards goals such as your retirement,” he says.

He notes that beneath the surface, however, there are a range of additional expenses that could sink your finances deeply into the red.

“You could for instance need to make adjustments to your home or pay for a carer to assist you during your recovery. And if you are a mother, your illness could mean that you would need to pay for someone to help you take care of your children.”

While your medical scheme should step in to pay for the costs of standard medical treatments and hospitalisation, de Villiers adds that you may wish to undergo an experimental treatment that may not be covered by your medical scheme.

“It is important to be aware that certain cutting-edge cancer treatments can cost more than R1 million, which means that in some cases having critical illness cover could even be life-saving.”

Choosing your critical illness cover

The range of diseases covered by critical illness policies differs from insurer to insurer, but de Villiers explains that the four most common conditions included are heart attacks, cancer, strokes and coronary by-pass grafts for heart disease, as these account for a significant number of critical illnesses in South Africa.

“However, you should take your own family and medical history into account when choosing your policy, as you may wish to also prioritise cover for other illnesses such as rheumatoid arthritis, Alzheimer’s or even cover for complications following a pregnancy,” he says.

Comprehensive critical illness policy benefits may further include cover for serious injuries such as major burns and impairments like a visual impairment.

ASISA member companies are required to include a standardised critical illness disclosure grid within your policy quotation to help you compare benefits. This grid sets out the percentage payments for the four most common conditions (heart attack, cancer, stroke and coronary by-pass grafts for heart disease) at certain standardised severity levels. The policy quotation will typically also provide a summary of all the other conditions covered.

In addition, your policy document will provide a more detailed list of all the conditions covered, with associated medical definitions and percentage payments.

Critical illness policies may also feature a range of additional terms and benefits that you should consider before choosing your policy. These include:

Multiple claims:

Some insurers offer policies with a single cover amount, and each claim decreases the amount of cover left available. If you had a R1 million policy for example, and were to make a claim amounting to R250 000 for cancer, you would still be able to make another claim of up to R750 000.

Other insurers offer a cover reinstatement option, where you can make multiple claims against the same policy without depleting the cover amount.

Survival periods:

Critical illness cover is intended to aid individuals with living and medical expenses while they are alive. Some insurers may therefore institute a survival period between when the illness or injury happens and when benefits can be paid, which must be disclosed in the policy document.

Protection for family members:

Some policies offer additional benefits such as limited critical illness cover for family members, such as children or parents.

Finally, de Villiers adds that critical illness products can be complex and may feature many medical concepts that can be confusing or difficult to understand.

“A professional financial adviser will be able to guide you on taking out a policy that is suited to your individual needs and affordability. Your financial adviser will also be able to help you understand the conditions of your policy, and give you peace of mind that you and your family are adequately protected should the unexpected strike.”

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