Medical aid is one insurance most of us see the benefits of quite early on. It’s annoying when claims get refused, or when one reaches the limit on, say, dental spending way too early in the year – but by and large, over the course of time, most of us have reason to be grateful for our medical funds.
Unless you’re lucky enough to be a member of one of the more luxurious company medical aids, however, the picture gets a little less rosy should you be diagnosed with, say, cancer.
Dread Disease cover
That’s where Dread Disease cover has a role. It’s designed to help with costs associated with lifestyle changes that arise from surviving a dreaded disease. For example, after surviving a heart attack, one may not be able to climb the stairs in a multi-storey home and so the installation of a mechanical lift may be required. Or having gone through cancer treatment, one may find oneself weakened, and reliant on domestic help. “After-the-fact” costs can be horrendous.
Dread Disease cover is not a top-up to medical aid cover, and pays out only upon diagnosis and survival of a set of specific diseases. The four major conditions which should be covered by all policies are stroke, heart attack, cancer and coronary artery bypass surgery, although individual policies may list many others.
Because this insurance isn’t governed by Council of Medical Schemes rules, policies can specify the benefits and conditions under which they will pay out without being tied to minimum benefits. It also means that they can charge varying premiums depending on the policyholder’s state of health and other risk factors.
To illustrate the different protective benefits of both products, consider the case of Mrs Ndlovu, a 56-year-old mother of two who discovered a lump in her right breast. A visit to her doctor confirmed that she has breast cancer. She has both medical aid and dread disease cover.
The cost of her visits to the doctor, diagnostic tests, hospitalisation, mastectomy and other medical treatments were covered by her medical aid policy and she was able to leave the hospital and recuperate at home with her family. However, the experience had left her depressed and demotivated. She no longer had the drive to return to her career in the financial industry and needed time off. Her doctor recommended counselling.
After a recuperative holiday with her family she decided to follow her lifelong passion and became a teacher. She was able to pay for the counselling, family holiday and teacher training with the payout she received from her dread disease cover.
Dread Disease cover is not terribly expensive, and is often most cost-effective when taken in conjunction with a life policy, so chat to your financial advisor. Remember, it does not pay for the things your medical aid covers, so don’t make the mistake of swopping one for the other.
(This is an edited version of an article originally written by Farai Muronda, Liberty Group Advisory Services, for Health24, August 2009)
How medical schemes work