Are Cancer Policies a Good Idea?

Cancer isn’t pleasant to think about, but it is a reality for many women. October is breast cancer awareness month, and we’re reminded to go for regular check-ups.

Early detection saves lives, but what about the financial impacts?

Cancer treatment can cost anywhere between R10,000 and R1m, according to Icon Oncology. This can be financially crippling unless you have some financial protection.

[Moms are you on a cancer medical scheme, or have you or a loved one been impacted by this? Comment below to share your story and let’s help each other and learn together.]

What will my medical scheme cover?

By law, all medical schemes have to cover Prescribed Minimum Benefits (PMBs) whether the treatment is in a hospital or as an outpatient, and most cancers are covered under this.

However, you may not be able to pick where you are treated. Your medical scheme may insist that you consult specialists, go to hospitals in their network, or a state facility if you’re on a low-cost scheme. If the cancer is deemed untreatable, then the PMBs don’t apply.

Will there be other expenses?

Apart from your direct medical costs, you may also need money to pay for other costs. This includes traveling to treatment centers, buying wigs or specialized bras, providing child care, or even just taking care of your living expenses while you are off work recuperating.

Having extra cash at a time like this will allow you to focus on healing, instead of fretting about paying bills.

Is a policy the solution?

There are different types of policies that pay out a lump sum on the diagnosis of an illness. Some cover you for cancer only, including breast, cervical, uterine, or kidney cancer.

These policies are generally cheaper than a policy that covers you for a full spectrum of severe illnesses. They may also cover you for pregnancy complications, or even cover your newborn children, and they may include cash-back benefits if you’re claim-free for several years.

The problem with these cancer policies is the limited medical conditions they cover. More comprehensive policies, called severe illness or trauma policies, cover a very wide range of conditions, including cancer.

But the premiums will be higher than the cancer-only policy, and may even increase over time. Many are also ‘severity-based’, in other words, they pay out a percentage of the cover amount, depending on how severe your condition is when you claim. Some may also offer cash-back benefits.

Cancer policy or severe illness policy?

Taking out cover for cancer alone makes little sense if you consider that cancer, stroke, and heart attack account for more than 80% of all severe illness claims. You have no way of predicting which condition you may get, so you should cover yourself as widely as possible.

This comes at a cost, so a cancer policy may be the only affordable option initially, but you should take out full severe illness coverage as soon as you can afford to.

When will my cover end?

Some cancer policies have a maximum cut-off age (65 for example), whereas severe illness policies can be in force until you die. The older you get, the greater your risk of contracting a severe illness, including cancer.

So it makes no sense to take out a policy that stops when you reach 65. Don’t fall into that trap.

How do I know I’m making the right decision?

There are so many options to choose from, and some have really cute marketing angles, such as policies designed specifically for women.

You need to look past this and understand exactly what you’re buying. Get answers to these questions before you sign on the dotted line:

1. What medical conditions are covered?
2. Is there a cut-off age for cover?
3. What is the process for claiming (and are there any conditions)?
4. Will the full amount be paid out, or is it severity-based?
5. Will the premium and cover remain level, or will they increase annually?
6. Is there a cash-back, and what is the cost? Is it optional?

Moms are you on a cancer medical scheme, or have you or a loved one been impacted by this?

Comment below to share your story and let’s help each other and learn together.

This article was written by Sylvia Walker, financial planner, speaker, and author of smartwoman. www.sylviawalker.co.za