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I guess what really concerns me is how many people you hear of nowadays that are being diagnosed with a critical illness!
As a kid, I can’t remember anyone in my immediate or extended family or even a family friend who was diagnosed with cancer or some other nasty dread disease. Actually I can’t even recall anyone we knew that died of a heart attack either. Twenty years on and that has all changed. Now thirty year old guys and gals my age are dropping dead from heart attacks, being diagnosed with cancer and having strokes. 
What is it? Are we eating too much processed food stuffs? Are we trading big bucks for stressful jobs which are slowly killing our bodies? Perhaps it’s just the hectic unavoidably pace of life in the twenty first century (put up your hand if you feel you need a holiday!). Whatever it is, it’s real and frightening and you have to be smart enough to at least recognize the fact that there is an increasingly real chance that you could become a horrible dread disease statistic yourself. Actually, Altrisk (Hollard Life) have just released their latest finalized claim statistics ending March 2010. A staggering 24% of claims paid to-date have been critical illness related. 49% of those critical illness claims are as a result of cancer. If you want to see how many claims have been paid from critical illness benefits, click here. The stats don’t lie. Illness is killing us quicker than ever before!
So why do you need some type of critical illness cover in place?
It’s obvious isn’t it? If you become seriously ill, you might not be able to work. Perhaps it’s only temporary, maybe it’s indefinitely (that will depend on how severe your illness is).
No work, means no money and no money mean’s financial hardship. That really is the bottom line. Having some type of critical illness insurance cover in place is going to insure that you get a lump sum payout on diagnosis of the illness which is going to ease your money problems. The more comprehensive the critical illness benefit, the more eventualities it’s going to cover and the higher the payout you can expect, but I will get to that specific detail a little later.
Before we cover what you should look at in a critical illness benefit, these are the (3) questions I think you need to be asking yourself before deciding if you need critical illness cover or not.
Is there a history of critical illness in your family and are you at risk?
Maybe you have great genes and have been cut from the very same cloth as Hercules. Good on you, it might minimize your chances of picking up a dreaded disease, but it certainly doesn’t exclude you altogether. Those of us that have a history of critical illness in the family should really be aware that it seriously increases the chances of being diagnosed ourselves. Actually life insurance underwriters are so aware of this risk factor when making life insurance application decisions that there is an entire section in the life insurance proposal form dedicated to “History of Family Illness”.
If they are looking at these factors, shouldn’t you? I mean, if your mom had breast cancer and your sister had breast cancer, you should know that there might be a good chance you could be diagnosed with breast cancer as well. If there is a history of family illness don’t take a chance, get insured, because your risk might be much higher than you think.
Will your medical aid plan pick up the cost of all your critical illness treatment?
The answer is probably not. While medical aid premiums are going up, benefits offered by the same companies are coming down. So how much of that oncology treatment is your medical aid company going to actually pick up? Have you asked them? You better believe that it is going to be capped at a specific rand amount.
The super- dooper medical aid plans are obviously going to pick up more of the cost than your average medical aid plans, but how many of us are even able to afford those Rolls Royce medical aid plan premiums anyway? Very few! I’m certainly not on the most comprehensive plan offered by my medical aid company, simply because I can’t afford to be. I actually recently called my medical aid company to find out what the annual oncology benefit is. It’s R200 000. That’s the limit offered on all the plans bar the super-fly top of the range option. If I was struck down with a horrible cancer and needed ongoing treatment, I have a sneaking suspicion R200 000 is not going to cut it. You get my point! Don’t expect your medical aid to pick up the entire tab when you get critically ill, look to take out some separate critical illness cover to cover any potential shortfall.
Will your company be happy to keep you on when you are seriously ill?
Again, the answer is probably not. This decision will however be different from one company to another and you should take the time to investigate your company’s internal policy on these issues. In a new age work environment when all that seems to count is company profitability and regular large shareholders dividend payouts, what are the chances of your company keeping you on when you are seriously ill? Slim to none, in my opinion. The days of company loyalty and sympathy have been replaced with greed and ruthlessness. If your company is kind enough to offer group life benefits, perhaps you will qualify for a claim under the disability group benefit. That is of course if your illness meets the disability definition. If your company doesn’t offer these types of benefits – and aren’t going to keep you on – you are screwed. You will be out of work, desperately ill and unfortunately looking to the Gods for some type of heavenly intervention. So do yourself a favour and investigate what benefits your company offers. You might probably find that you need to top up with some critical illness cover.
What to look out for when deciding on a critical illness benefit?
Ok Brendan, you have scared the begezeers out of me. I don’t think my company offers any type of benefits. What do I look for when shopping for a critical illness benefit and what does the benefit actually cover?
Good question, so let’s get straight to it. For the purposes of this blog post I am using the Altrisk (Hollard Life) Comprehensive Critical Illness Max Benefit policy wording as reference. The policy wording can be downloaded here.
Only go for the most comprehensive critical illness benefit available offering the widest scope of cover
Firstly, always look for a critical illness benefit that has the keywords (“comprehensive, max, plus, elevated) in the title. Look for anything in the benefit name that indicates it’s the “best of breed” benefit. If you are not sure, ask someone. Only ever go, for the best of the best critical illness benefit available through the life insurer you decide to place your business with.
Why is that? It’s because just like any insurance cover you ever buy, the more comprehensive the offering, the more eventualities it’s going to cover and the bigger the payout at claim stage. You see, disability benefits like critical illness benefits are paid out on a percentage basis. The more severe the critical illness the higher the percentage payout you can expect. If you go for the most comprehensive critical illness offering, it is going to cover more illnesses at higher percentage payouts than a cheaper less comprehensive benefit.
Let’s take Altrisk’s critical illness benefit offering as an example of how this works:
| Basic Critical Illness | Core Critical Illness | Comprehensive Critical Illness |
| 4 Conditions Covered | 26 Conditions Covered | 46 Conditions Covered |
Automatically you can see why you need to go for the most comprehensive benefit. 4 conditions covered by the basic critical illness offering versus 46 conditions covered by the comprehensive offering. The scope of the cover is simply wider. It’s a no brainer, right? Well, the problem as I have mentioned before is that it’s not always that easy as a laymen to pick this type of thing up before it’s too late. When comparing quotes between brokers, check to see if they’re quoting on core benefits which are cheaper, or are they quoting on comprehensive benefits? Don’t simply accept the cheapest quote! Do the due diligence and check the benefits before putting pen to paper.
Look for a critical illness benefit that offers a 100% payout for major events like heart attacks & cancer.
Why is this important? It’s actually not important, it’s crucial. For the major critical illness events you are more likely to suffer from, like having a heart attack, being diagnosed with cancer or having a stroke, you want a 100% pay out. No mess, no fuss. So if you insured yourself for R1000 000, you want a full R1000 000 pay out on diagnosis of the illness. Only the most comprehensive critical illness benefits are going to offer you this max payout option. The cheaper, less comprehensive benefits are only ever going to pay out on a severity basis.
Again, let’s have a look at an example of how this actually works. We will again use the Altrisk critical benefit offering to highlight the point I am trying to make.
| Basic Critical Illness | Core Critical Illness | Comprehensive Critical Illness |
| Severity Based Claims | Severity or Max Pay out | Max Pay Out for Major Events |
The basic critical benefit is only ever going to pay out on a tiered basis which will be based on the severity of the claim. With the core option, it could be either severity based or max pay out. With the comprehensive offering it’s going to be max pay out for the major events (the biggies, like heart attacks, coronary artery disease, cancer, stroke). Why knowing what you know now, would you consider any other alternative besides the comprehensive option?
Below are the Benefit Group Offerings applicable to the Comprehensive Critical Illness Benefit Offering:
- Cardiovascular
- Nervous System
- Cancer
- Kidney & Liver
- Respiratory
- Gastro – Intestinal
- Connective Tissue Diseases
- Sensory Group
- Trauma & Musculoskeletal
- AIDS / HIV
- Children’s Benefit
In closing…
We never think about getting struck down with an illness that might leave us incapacitated. I hope that all our clients and loyal readers live full and healthy lives. I sincerely mean that 
The problem is that life isn’t fair. Some of us will inevitably pick up a nasty illness that creates havoc in our lives. You have no idea when and if it will ever strike. We do have the choice to at least insure ourselves against the eventuality. Money can’t buy everything, but it can buy a little piece of mind when your world is falling apart.
If you need a quote for critical illness or help in determining how comprehensive your current benefit is, please contact us here
Until next time!
Brendan Els
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