Most of us think we've got the big stuff covered. Medical aid for the doctor's bills. Life cover so the people we love aren't left struggling. Tick, tick - sorted. Except there's a gap sitting quietly in the middle, and most people never notice it until they've fallen into it. Because medical aid pays the hospital, not your bond. Life cover pays out when you're gone, not when you're recovering. So what happens in the in-between - when you survive something serious like cancer, a heart attack or a stroke, but you can't work for months while life keeps sending its bills?
That's the gap. And critical illness cover is the bit that fills it.
The cover almost no one has, but everyone needs
According to Old Mutual (2024) critical illness cover only accounts for 3% of the premium amount in group risk in South Africa's insurance market. Critical illness cover policies include many different illness definitions, exclusions and specifics, meaning these policies often end up being rather complex. This complexity overwhelms and intimidates individuals and explains why this benefit is one that so few South Africans have.
Critical illness cover: what is it? And how much cover is enough?
Critical illness cover, often referred to as "dread disease cover", provides a lump sum payment to the insured upon diagnosis of a severe illness. These illnesses will be stipulated in the policy document, and the payout amount is dependent on the severity of the illness. Introduced in South Africa around 45 years ago, critical illness cover started off by helping people when it came to the biggest names - cancer, strokes, heart attacks. Over the years, this benefit has morphed and expanded to include many other conditions, and to include different levels of severity of health conditions.
Due to the wide range of illnesses covered, and the varying levels of treatment and severity for each, there are countless medical cover options available to you. It is therefore important that before deciding on a critical illness cover amount, you evaluate your medical cover that is already in place, and what might be missing from it. This requires looking at things like medical aid cover, gap cover, disability cover, income protection cover and so forth. Any additional health benefits that you may have, should complement your critical illness cover and reduce your financial risk - but none of them should be redundant or should majorly overlap in any way.
The fine-print: things to take into consideration
Ideally, you should have cover that increases over time, specifically increasing annually alongside your national inflation rate. This ensures that the value of your cover remains relevant and that should you need a payout, its value remains intact. Critical illness cover does not need to be under its own policy, and often can be incorporated as a standalone benefit or additional benefit to your life cover policy.
It is important to note that the critical illness cover is also a tax-free benefit, meaning that in the event of you requiring a lump-sum payout, this payout will be tax-free. It is also important to take note of the waiting period for your critical illness cover - this period means that your policy is active, but you are unable to claim from said policy during this time. Critical illness benefits generally include a survival period too, which is a period you must pass in order for any claims to be eligible for payout.
Critical illness cover is designed to remove or lessen any financial pressures you might have after a life-changing diagnosis or illness such as suffering from a stroke or a heart attack. The reason critical illness cover exists, is so that treatment and recovery can be your focus, not finances and the stress of how to cover them.
Simply's critical illness benefit: the leg-up you didn't know you needed
Yes the fine-print may seem complex, and yes it may seem difficult to find a benefit that perfectly matches your life situation. Luckily for you, Simply has recently added critical illness cover as a benefit that forms part of its Flexi Staff Cover policy. This means that employers are able to cover their employees, should they be diagnosed with any qualifying serious illnesses.
Simply's critical illness cover pays a cash lump-sum paid to an employee if they are diagnosed with one of the covered illnesses. Policyholders can choose between a core and a comprehensive option: the core option covers the most common and severe conditions, whereas the comprehensive option covers additional conditions and can pay out earlier in some instances, depending on the diagnosis.
The cover limit is expressed as whichever value is lowest of the following three items: three times your annual salary, R2.5 million or your Life Cover amount. Certain diseases and variations of diseases are excluded from this policy, and these exclusions are stipulated in our policy documents. Please be aware of certain exclusions (medical and non-medical) that are also expressed comprehensively in our policy documents.
Surviving the illness is only half the battle
Nobody plans to get seriously ill. But surviving the illness is only half the battle - the other half is surviving the cost of it - the lost income, the extra expenses and the slow climb back to normal while the rent's still due.
Critical illness cover doesn't replace your medical aid or your life cover. It backs them up. It's the friend that steps in for the part everyone forgets to plan for, handing you a lump sum to spend however you need - so you can focus on getting better, not on doing the maths. You can't predict the curveball, however, you can decide not to face it broke and in shambles. To find out more about Simply's critical illness cover, and how it can fit uniquely into your lifestyle, visit simply.co.za/staff-cover.
Simply Financial Services (Pty) Ltd is a registered financial services provider (FSP 47146). T&Cs online.