Are your clients' employees protected against the lifestyle related costs associated with cancer?

27 May 2019 Momentum Corporate
Nashalin Portrag, Marketing Actuary at Momentum Corporate

Nashalin Portrag, Marketing Actuary at Momentum Corporate

Cancer is statistically the fastest-growing critical illness in South Africa with a projected increase of 78% by 2030, according to an article “The future cost of cancer in South Africa: An interdisciplinary cost management strategy” published in the South African Medical Journal in October 2016. This trend is also highlighted by Momentum Corporate’s claims statistics, indicating that overall cancer claims have increased by 48% since 2012, and represent 15% of all disability benefit claims in 2018.

Furthermore, 21% of Momentum Corporate’s total cancer-related claims between 2012 and 2018 were paid to employees below the age of 40, who belong to group insurance schemes. According to Nashalin Portrag, Marketing Actuary at Momentum Corporate, this indicates that there is a rise in the proportion of cancer claims relating to younger members.

“This is an alarming statistic considering, based on additional research and analytics we’ve conducted, that Millennials’ representation in the workplace has grown over the past five years from 39% to 52%, while Generation Z is expected to make up 24% of the workforce by 2020. This indicates that employers and their employees face a significant challenge when it comes to workforce incapacity due to cancer related incidents.”

Portrag says that this shift also highlights the important role financial advisers play in ensuring that their clients’ employee benefits offerings are appropriate and at the right level to protect their businesses and employees against the financial impact of cancer.

“To make matters worse, the costs associated with treatment for this non-discriminatory disease continue to rise. According to the same research published in the South African Medical journal in October 2016, the typical medical costs for cancer treatment is estimated to be as high as R1 million,” he adds.

Portrag notes that over and above these medical costs which are normally covered to some extent by the member’s medical aid, there are also often many non-medical related or lifestyle expenses associated with cancer. “Transport costs to chemotherapy, new clothes due to potential weight loss, hairpieces, home nursing care and equipment and certain lifestyle adjustment expenses can all add up very quickly, and cause significant financial vulnerability at a time when patients need to focus their energy on recovering.”

Portrag believes the challenge is that employees may be under the impression that the disability benefits they have through their employers, whether it is a lump sum or income disability benefit, will cover the additional lifestyle related expenses. “The purpose of a disability benefit is to replace employees’ income during the time that they are away from work, for example while they are on unpaid leave, due to cancer.

He believes that to avoid this challenge, financial advisers should consider partnering with a future-fit group insurance provider that offers affordable innovative benefits specifically designed to cover the financial gaps that are caused by the lifestyle related costs associated with cancer. “An innovative critical illness top-up benefit designed especially for cancer should pay out to the employee once they are diagnosed and the level of benefit should be dependent on the severity of the illness.” Portrag goes on to say that the payment should be independent from the cost covered by their medical aid and irrespective of their disability benefits.

“If employers include this type of a top-up critical illness benefit in their employee benefits offering, their employees will be able to cover their lifestyle related expenses caused by cancer irrespective of if they are still able to work or not and irrespective of the level of medical aid cover they have.

“Financial advisers therefore have a crucial role to play in ensuring that their clients’ businesses are protected against the cancer tsunami South Africa faces, and that the group benefits offered to their employees are appropriate and at the right level to cover all the various cost elements caused by cancer,” concludes Portrag.

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