Too young to get ill?

2014-10-13 08:00

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Insurance cover can seem like a waste of money when you are in your 20s or 30s. But don’t tempt fate. Maya Fisher-French advises on critical illness, income protection and life cover

When Greg (35) was rushed to hospital after a virus attacked his heart, it gave him a serious wake-up call. The attack came out of the blue. While he was for all intents and purposes healthy and fit, with no cholesterol or blood pressure problems, he contracted pericarditis, an inflammation of the sac-like membrane surrounding the heart.

In this case, it was caused by a virus. There is no genetic disposition or any health reason for its occurrence. It just happened.

“I was in good health, but I was under major stress. I work for a company that puts on live events and the show must always go on. It is a highly stressful environment,” explains Greg, who was about to become a father for the first time.

At that stage, Greg had no long-term insurance, such as critical illness, income protection or life cover. If he had died, he would have left his wife a single mother with no financial support for herself or their newborn child.

But Greg did have good medical cover – although that too was a stroke of luck. With a child on the way, the cost of his wife’s fully comprehensive medical cover was going to become too expensive for the family of three.

As Greg was in excellent health and had only ever seen a doctor once in the 15 years prior to his condition, he decided to downgrade to a hospital plan. As he was changing cover, a standard three-month waiting period on claims would have applied.

“I was very lucky all the bills were covered. If I had to pay the R93?000 worth of hospital bills, I would have sunk financially. My wife also landed up in the emergency room as her blood pressure had dropped.

“We had enough stress, with me in hospital and a baby on the way, so to have financial stress as well would have been overwhelming,” says Greg, who has subsequently decided to remain on his wife’s medical plan.

The financial issues came after Greg left the hospital. Firstly, his medication of R1?000 per month was not covered as a chronic condition by the medical scheme and came directly out of his day-to-day savings.

With a child on the way and knowing the costs of paediatric bills, Greg did not want to deplete the savings and chose to pay for his medication from his own pocket.

Greg also needed to go for counselling to help him come to terms with what had happened and learn how to manage his life going forward to reduce stress. The condition can take many years to recover from and any form of stress can trigger another attack. A month after his son was born, he had a relapse and had to be rushed to hospital.

“It was a big eye-opener, and maybe the wake-up call I needed. For many years, I had not paid my body the respect it deserved and often worked 24-hour shifts.

“Now there are more important things than my job. I don’t want my wife to be a single mother or my son to be raised without a father,” says Greg.

Again, Greg paid the R3?000 worth of counselling bills out of his own pocket so as not to affect the medical savings.

Three years earlier, Greg had been working at his own business, but by the time he fell ill, he was fortunately working for a company that supported him for the three weeks of sick leave he needed.

“If I had been still working for myself, it would have been a financial nightmare.

“There are two different types of stress – positive stress when you are working flat out and negative stress when it comes to worrying about the finances of your own business. At least I didn’t have that stress as well,” says Greg.

When you are in your 20s or early 30s, especially if you have not yet started a family, insurance cover can seem like a waste of money.

This is a time in your life when you are starting to accumulate assets and want to focus on buying a home or starting your own business. There are so many demands on your pocket, insurance is one box that does not get ticked.

Yet younger people are more likely to claim for disability or critical illness than death.

The statistics suggest an increase in illness in younger people and, like Greg’s experience, much is attributed to stress levels.

Conditions such as cancer, heart attacks and autoimmune disorders are more likely when stress levels are high.

WHAT COVER DO YOU NEED?

Medical cover: A good hospital plan would pay for all medical costs if you have to be hospitalised. It would also cover 27 chronic conditions specified under prescribed minimum benefits. A more comprehensive cover becomes important once you start a family.

Critical illness: If Greg had critical illness cover, he could have used the payment to cover his medication and therapy costs, as well as pay off any short-term debt, thereby further reducing any stress as a result of financial difficulty. This can also be used to make any other necessary, nonmedical, lifestyle changes.

Income protection: Although Greg’s company continued to pay his salary, if he had been self-employed, income protection insurance would have paid him his salary while he was unable to work. This is relevant if you have to take more than a month off.

Life cover: If Greg had died as a result of his attack, life cover would have provided for his child’s education as well as financial support for his wife.

What would it cost? Although premiums would depend on the individual’s risk factors – R1?million life cover, R1?million critical illness cover and R25?000 temporary income protection for a 35-year-old could be purchased for less than R500 a month.

WHAT UNDER 35s CLAIM FOR

Car accidents: The most claims paid out to policyholders under the age of 35 were for loss of income (46.6% of claims), of which musculoskeletal injury, usually a result of a car accident, was the major cause. At least 45% of claims as a result of death for under 35s resulted from car accidents.

Cancer: Nearly 26% of claims paid by Liberty to younger policyholders were for lifestyle protection (critical illness), of which 40% were cancer related. Liberty found that skin cancer was more dominant among younger policyholders, possibly due to overexposure to the sun during sport and training.

Heart: At least 25% of claims for lifestyle protection were for cardiovascular illness, responsible for 14.3% of death claims for people under the age of 35. The incidence of cardiovascular illness for lifestyle protection was double for smokers.

Retrenchment: Nearly 12% of loss of income protection payments were due to retrenchment.

Source: Liberty 2013 claim statistics

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