A dreaded thought

Last updated on 13th December, 2017 at 10:19 am

Dread diseases. The mere term fills us with fear, and rightly so. But what exactly constitutes dread diseases – and why should we make provision for them?

A dread disease is an illness or disorder that significantly affects a person’s lifestyle, and includes, but is not limited to heart attacks, cancer, strokes and coronary artery bypass grafts. These four make up between 70% and 90% of all dread disease claims. Other dread diseases include kidney failure, major organ transplants, paralysis, blindness, Alzheimer’s or Parkinson’s diseases, major burns and brain damage. Dread disease cover is an insurance policy that typically pays out a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses as listed in the insurance policy.

What is covered by a dread disease policy?

A dread disease payout is intended to pay for medical aid shortfalls and expenses not usually paid by medical aid. It can also supplement reduced incomes when the illness is so debilitating that a career change or even stopping work is required, and in some cases, the benefit assists with experiences like a holiday, to help ease the emotional impact of the disease. Policies from insurers can cover the big four illnesses only, or they may cover a list of illnesses and include a “catch-all” clause, which means any disease may be covered if it seriously affects your health and ability to function, usually on a permanent basis.

When do dread disease policies pay out?

Some policies pay out the full assured amount on diagnosis of a dread disease, while others pay out a percentage of the amount, depending on the severity of your illness, and include payouts for less severe illnesses. These are known as tiered benefits.

How much cover do I need?

This is an important question with no easy answer. It all depends on your needs, your family history regarding serious illnesses, and the premium you can afford. The cover you need to protect you from the impact of dread diseases on your life is best discussed with a financial adviser who can recommend the level and type of cover most appropriate to your needs and budget. Your annual salary is the rule of thumb often used in the marketplace.

By Helen Ueckermann

Not a pleasant topic, but chat to your financial adviser about the best plan for you. Click here to find an adviser.