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Gap cover is more important than ever as lockdown restrictions continue to ease

04 November 2020 Tony Singleton, CEO at Turnberry Risk Solutions
Tony Singleton, CEO at Turnberry Risk Solutions

Tony Singleton, CEO at Turnberry Risk Solutions

As we pass 200 days since the start of lockdown, restrictions continue to be eased and life returns to something resembling ‘normal’. This means more people will be going back to work and school, going on holiday after being restricted for months, and even trying new outdoor activities as we head into summer.

This, in turn means an increased likelihood of accidents and illness. It also means more people will likely have the elective medical procedures that were put on hold during the pandemic. This could result in significant out of pocket medical expense shortfalls that many people simply cannot afford if they do not have the right combination of medical aid and gap cover in place to protect them.

Make sure you are covered effectively
The pandemic has had a significant impact on all areas of our lives. For many, it has meant reduced income and heightened financial strain, and one area where some people may have made sacrifices is in their level of medical aid cover. Conversely, Covid-19 has also highlighted the importance of having sufficient medical cover. Since there is no single medical scheme plan that covers 100% of all events, and affordability is crucial, it emphasised the importance of gap cover as well.

As an example, many people found themselves experiencing worrying Covid-19 symptoms after hours or on weekends or public holidays. They were left with little option but to visit the casualty department of a hospital. The out of pocket expenses related to this can run into thousands of Rands, but a gap cover policy with a casualty benefit for illness would protect members and cover the fees.

In addition, members who chose to make use of non-designated service provider (DSP) hospitals for Covid-19 conditions would have found themselves with co-payments and possible shortfalls, unless they had gap cover. For those unfortunate enough to lose the main breadwinner to the virus, gap cover with a critical illness benefit would also have paid out a lump sum,.

Medical aid, augmented by the right level of gap cover, has been a lifeline for many members. Now, as we emerge from the cocoon of lockdown, our need for effective medical cover only increases.

Looking beyond Covid to protect your financial future
Although South Africa has eased lockdown restrictions, Covid-19 has not gone away, and if we follow the same trajectory as the rest of the world, we can expect to see a second wave of the virus in the weeks and months to come. In many countries this second surge has seen more cases than the first, which means that effective medical cover will continue to be a priority as we head into the new year.

Even if the predicted second wave does not occur, gap cover remains essential. Accidents and illnesses still happen, and the need for medical care never goes away. With medical scheme increases for 2021 the lowest that they have been in years, there will still undoubtedly be an increase in co-payments, sub-limits and medical expense shortfalls across the board.

Without gap cover in place to protect from the worst of this, many people could find themselves facing increased financial difficulty. Individuals should speak to their financial advisors to ensure that they have the correct combination of Medical Aid and Gap cover in place before the end of the year, to ensure they are protected through Covid-19 and beyond.

Quick Polls

QUESTION

ASISA’s lobbying of the SARB to suspend Circular 15, which contained significant changes to foreign exchange controls. What is your take on this accusation?

ANSWER

[a] ASISA was right to seek clarity on Circular 15
[b] Large asset managers are conflicted & will suffer financially if Circular 15 stands
[c] Savers get enough exposure to offshore assets under existing Reg 28
[d] Who cares?
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