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Health insurance
Thursday, March 1, 2012
Dread disease

According to insurance claims statistics released by Altrisk for January 2011 to December 2011, cancer is the leading cause of all insurance claims across critical illness, income protection and life cover, followed by accidental causes and cardiovascular disease.


The statistics illustrate:
• In terms of critical illness insurance claims, 78% of all claims paid were for cancer, followed by cardiovascular disease at 27% and neurological causes at 15%.
• On income protection claims, 7% of all claims are cancer claims.
• Across all cancer-related claims for life, critical illness and income protection, breast cancer, colon cancer, and malignant melanoma are the main causes
• Of the total claims paid by Altrisk during the period, 48% of claims paid were for life cover, 21% of claims paid were for income protection and 17% of claims paid were for critical illness. The claims proportions are driven by the volume of cover for each benefit.
• The cause of claims varies per benefit, with the main cause on income benefits being accidental, while cancer is the main cause for critical illness claims.

According to Ryan Chegwidden, Actuarial Executive at Altrisk, the statistics highlight the importance of having cover in place to manage the consequences of contracting a serious illness or having a debilitating accident. “Statistically, the probability of becoming disabled during your working life is about 13%. For the average 40 year old, the chance of contracting a life-changing critical illness by the age of 75 is much higher at about 43% for men and 34% for women. So while there’s still a chance you may not contract a critical illness, the financial consequences if it does happen are potentially devastating. Make sure that you understand these consequences and that you have a plan if either of these were to happen to you – for most people insurance is the only way to meet the need and for others it’s a cost-effective way to manage the risk,” he explains.
Wally Bodin, an independent financial advisor and planner says, “Critical illness cover has evolved since the 90s to a modern day ‘must have’ in financial planning. Planners no longer wait for their clients to reach a ‘mature’ age to put critical illness cover in place. The fact that a client in their early thirties is healthy is no reason not to cover them for critical illness. This wasn’t always common practice, but when one looks at statistics for cancer claims, people are being diagnosed at far younger ages than they were 20 years ago due to medical advances and greater awareness. Recent industry-wide claims statistics reveal that cancer is responsible for more than 50% of all dread disease claims. Sadly, cancer knows no age. Women are the most neglected market, and ironically, they have almost double the number of claims than men.”
Mr Chegwidden adds, “Getting your life, critical illness, disability and income protection cover in place should top your list of priorities. There’s a tendency to think that insurance cover can be sorted out ‘later’, and many people even avoid the issue completely because they think it is too complicated, or even unnecessary. The 2010 Life and Disability Insurance Gap Study asserts the fact that South Africans remain seriously underinsured.
“There are very few people who don’t need to work to pay the bills. Your bond repayments, credit cards, electricity and water, taxes, school fees and grocery bills won’t stop arriving just because you’re sick or injured to the point that you are unable to work and function normally. Given these statistics, protection against the consequences of contracting a critical illness or suffering a serious accident should be a top priority. With the plethora of products available on the market in terms of lifestyle and income protection, consult with a professional financial advisor who can assist you with your insurance choices.”

Copyright © Insurance Times and Investments® Vol:25.3 1st March, 2012
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