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By Nonkululeko Zungu, 17 September 2019
That’s where a cancer benefit can play a big role in helping to ease financial distress. It is important to choose the right benefit for you. Comparing ‘apples with apples’ isn’t always easy, so consulting a trusted financial planner is the best starting point.
Nonkululeko Zungu, Product Support Consultant for Sanlam Individual Life, explains that cancer benefits cover different types of cancers. The types of cancers covered differ between insurers. Also, different benefits may pay out different percentages of the cover amount depending on the severity (stage) of the cancer. Hence, you need to consider the types of cancers covered as well as the percentage of the cover amount paid for the various severity levels.
There’s no one-size-fits-all answer. It depends on you, your budget, your family history with cancer and other factors. The ideal is to find a benefit that meets your needs and gives you value for money.
Zungu outlines a few considerations when doing the comparison.
One means of comparison is to compare the percentage of the cover amount paid for different severity levels of cancer. Insurers disclose their payout percentages under the ASISA SCIDEP* disclosure grid for cancers covered by the SCIDEP definitions.
The better benefits tailor the percentage payout not only to the severity (stage) of the cancer, but also its likely impact on a person’s lifestyle. For example, Sanlam’s Cancer Benefit pays 100% for certain aggressive cancers in their early stages, even if the more affordable benefit option is selected. For other insurers, selecting a more affordable option usually results in smaller payouts for lesser severity cancers – even for aggressive cancers like liver cancer where the prognosis is typically poor and the impact on the lifestyle is severe.
To avoid having very long lists of specific types of cancers that are covered, while still giving the client peace of mind, some insurers include a catch-all claim event. When a cancer benefit provides cover for a catch-all claim event, cover is typically extended to cancers that may not be specifically listed as a claim event but are severe enough to affect your quality of life. The guidelines used to determine the level of severity when assessing a claim under the catch-all claim event will be disclosed in the policy documents.
The more comprehensive benefits include cover for additional cancer events that are not included in the SCIDEP cancer definitions. Examples include those that offer cover for certain early cancers. Your intermediary can help you dive deeper into comparing other non-SCIDEP cancer events, as these can get technical.
When comparing benefits, consider what you’ll pay as an initial premium, and what the premiums may be later. Lower initial premiums may come with higher premium increases later. Also factor in whether the premiums or any compulsory annual premium increases will remain the same and for how long these will remain unchanged. If you qualify for a discount from the insurer, will you continue to have that discount should your circumstances change (for example, if you stop going to the gym or cancel some of your other policies with the same insurer)? If not, by how much will the premium increase?
Ask a qualified and accredited intermediary:
*Insurers use the Association of Savings and Investments South Africa’s (ASISA) Standardised Critical Illness Definitions Project’s (SCIDEP) standardised definitions and disclosure grid. The SCIDEP disclosure grid lists severity levels, from most severe to least severe, and the insurer specifies the percentage of the cover amount they will pay under the different levels. The definitions of the severity levels as disclosed under the SCIDEP grid are standardised across the industry, so they are comparable between different products.