Severe illness cover can be a policy or benefit on a policy that pays you a lump sum on diagnosis of a serious illness, such as cancer or a heart attack. The benefit is designed to help you pay for the costs well beyond medical expenses that can arise when living 
with such an illness.
Severe illness cover is also known as dread disease cover or critical illness cover.
Increasingly, life insurers are also offering cover for serious injuries on these policies.
Severe illness cover differs from disability cover in that it pays out on diagnosis of a defined illness and in some cases injuries, rather than on an assessment of your ability to work.
You may be able to continue working while being treated for a severe illness, but the additional funds may be used to take additional time off, to pay for alternative treatment or for any rehabilitation or medical devices or equipment you may need.
Severe illness cover will also pay out if you are expected to recover from your illness, where lump sum disability cover typically only pays out if your disability is permanent.
While lump sum and income disability benefits are aimed at providing for lump sum needs such as the additional costs of an impairment, paying off debt or replacing lost income when you are disabled either temporarily or permanently, a severe illness benefit is aimed at providing for additional costs that put pressure on you financially when you have a serious health event.
Some policies offer additional benefits, such as limited critical illness cover for family members including children or parents.
Your medical scheme should cover the cost of cost-effective treatment. It may not cover all the medical treatment you wish you could have. You may also want to try alternative therapies your scheme does not cover. And you may want more rehabilitation or reconstructive surgery after an illness that your scheme does not cover.
Your medical scheme will not cover the cost of all adaptations to your home or equipment that may help you after a serious illness.
|
Severe or critical illness cover is now sold in many countries but had its origins in South Africa. Dr Marius Barnard, the brother of Dr Christiaan Barnard, who performed the first heart transplant at Groote Schuur in 1967, is regarded as the founder of critical or severe illness cover. Barnard was also a cardiac surgeon and part of the team with his brother who carried out the first heart transplant. Through his work, he realised that you are more likely to survive a major health crisis than you are to die from it, but, having survived, the cost of you living on after a health crisis is likely to be greater than the cost of providing for your family in the event of you dying. Barnard persuaded a small life insurance company, Crusader Life, to launch a severe illness policy in 1983. |
DID YOU KNOW?