Things you should know about severe illness cover - part 2

2017-07-06 06:01

Should I consider my family history?

It is a good idea to consider the illnesses that have affected members of your family, as genetics and family history play a significant role in your risk of developing certain conditions.

There is a clear link between heredity and serious conditions such as breast and other cancers, heart attack, stroke and diabetes.

You should consider your family history of critical illnesses to ensure you have sufficient and comprehensive cover for these illnesses, but you should not ignore other likely events.

You should buy the benefit that provides the best level of protection against all illnesses, within your means. Research shows that many illnesses are caused by behaviour i.e. three activities – smoking, poor nutrition and a lack of physical activity, are the major causes of the big four main diseases.

How should cover increase over time?

You need to increase the assured amount on your severe illness policy in line with inflation so an annual increase of between five and 10 percent is common.

How is this cover paid out i.e. lump sum or monthly payments?

Most companies pay out lump sum based on severity.

A major insurance company launched an enhancement on the Severe Illness benefit where it can pay an income for the first 12 months on diagnosis, which can help a client meet additional monthly costs following the diagnosis of a severe illness.

If a client does not recover and the additional expenses continue over the long term, the one-year period enables them to take stock and reprioritise their expenses and re-plan their budget so that these will be sustainable in the long run.

Does cover extend beyond age 65?

Most of the assurers offer severe illness cover for the whole of your life, but you usually need to be younger than 65 to take out the cover as the risk of contracting a dread disease increases as you get older, as do the premiums, so it makes sense to take out whole-of-life cover at a relatively young age.

You should consider the rate of increase of your premiums to ensure that your cover remains affordable. Critical illness cover is a benefit you may need in old age and it is vital that you do not lock yourself into a product with high premium escalations.

Can I get cover for stage zero cancer?

The earliest form of cancer, when the cancer cells are localised and have not invaded the surrounding tissue, is referred to as stage zero cancer.

If these abnormal or pre-cancerous cells are left untreated long enough, the condition will eventually progress to stage one, when the cells start attacking the surrounding healthy tissue.

Most life assurers cover pre-malignant, or stage zero, cancer only in the case of breast cancer.

This article is an excerpt from Personal Finance. You could contact me on 083 399 3905, my office on 032-944 3051 or e-mail me on juggieg@telkomsa.net for an appointment or further information and any other financial advice.

Disclaimer

The information is only intended to be of a general nature and should not be relied upon by any part without obtaining full details from a licensed financial service provider.

 

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