UNPICKING CRITICAL ILLNESS COVER


Investing & Money
piece written on the 13th August 2015 by  

The day that I clicked about how important investing is, is the day I decided to start a journey and whilst walking this road I was going to blog about what I found. It’s been an incredible few years, I’ve received a huge amount of interest from people and I’ve learnt more than I thought I ever would. Everyone’s got an opinion when it comes to investing but there are a few things you just simply cannot ignore regardless of who has said what. I’ve spoken to┬ásome really savvy people, people who say RA’s are a waste of time and people who say medical aid is a waste of time. If you’re one heck of a good investor, those scenarios are plausible, but if you’re a normal person, like me, then thinking that you can out invest medical aid is probably unwise.

Another topic that comes along with these is around critical illness cover, disability cover and such topics. When you meet with a financial planner/advisor these topics will come up and people are quick to laugh them off – me included. However, take a moment to sit quietly and think about this scenario:

You’ve spent many years working incredibly hard and one day you find out that you have a critical illness such as cancer or you’ve just had a stroke. You find out what’s involved from a medical point of view and you realise that your years of saving is now going to get completely depleted because of the medical costs. Just imagine that for a couple of minutes, you’ve just spent years working, saving towards a holiday, saving towards paying off your bond, saving towards sending your child to school and now everything you’ve saved for is going to go away to help you get better. I laughed this off for a long time, that’s not going to happen to me and then I read an article the one day that detailed what it’s like to deal with this and reality set in. Us human’s think we’re immortal and that nothing can harm us, until it does. We live in a very difficult day and age, life-threatening illnesses are more common than ever and if you could put something in place to protect your savings from this, why on earth wouldn’t you?

Let’s just be straight for a moment, critical illness cover does not replace medical aid, not in the slightest. Critical illness cover is an extension of medical aid in that it pays for the specialists involved and when it comes to something life-threatening, trust me, you’ll want specialists and the chances are that your medical aid will most definitely not cover them. I’m not expert on this topic, but I spoke to the folks at Momentum, who I work with often and they provided me with 5 advantages to having critical illness cover:

  1. Specialist cover and alternative treatment;
  2. To pay for recuperation aids;
  3. To fund unforeseen changes in lifestyle;
  4. To top-up cover for medial aid; and
  5. To settle any debts.

Those are some motivating factors if you take what I wrote above into account!

 

Disclaimer: I work with Momentum. With that being said, I have conducted my own research and am not swayed to say something I do not believe.