NFB Sensible Finance Magazine Issue 35 NFB Sensible Finance Magazine Issue 35 | Page 27

SENSIBLE COVER

SEVERE ILLNESS COVER What is it and why this benefit should be enhanced regularly

By Xintol Schoeman, Financial Paraplanner- NFB Gauteng.

S evere illness cover typically pays out a lump sum if you are diagnosed with a specifically listed, potentially life threatening condition.

The purpose of severe illness cover is to make up for the potential loss of income when you need to make lifestyle adjustments, such as slowing down your career, cutting back on your responsibilities at home, or employing someone to help you, or when you incur expenses related to your condition that are not covered by your medical scheme, such as adjustments to your home or rehabilitation costs.
Severe Illness is often over-looked due to the fact that it is a relatively expensive benefit, which is unfortunately due to the high probability of claiming.
Statistics show that 1 out of every 6 men and 1 out of every 7 women will be diagnosed with cancer in their lifetime, with a large majority of assurers Severe Illness claims being paid from this category.
Medical advances and increasing longevity is making severe illness cover an essential part of your financial safe guarding against serious illnesses or medical conditions, such as heart attacks, cancers and strokes.
You may be asked to upgrade your policy
Life companies are constantly changing and enhancing their Severe Illness benefits, which can leave you feeling powerless when choosing a policy or deciding whether or not to accept enhanced cover on your existing policy.
As medicine advances, severe illness cover is advancing and you, as policyholder, are likely to get a letter from your assurer at some stage advising you of an upgrade of your policy.
Your Severe Illness benefit may in some instances be automatically upgraded to include new illnesses and medical definitions at no additional cost, and you will receive a notification that this has been done.
However, where benefits are upgraded significantly, you will be presented with an offer to upgrade your cover for an increased premium. This enhancement in benefit may or may not include medical underwriting depending on whether your health is more or less the same as when you took out the cover.
Any changes in your health will, however, not affect the cover you already have in place.
It is important to note that whilst these benefit upgrades are completely optional, it is always advisable to enhance your Severe Illness benefit when presented with the opportunity to do so, to make sure that you have the most comprehensive cover in place. These enhancements often mean claimable events which are now payable at lower severity levels, the difference between single and multiple claims and claim definitions not previously considered.
In a nutshell, the more comprehensive your Severe Illness Benefit, the more likely you will be able to claim.
Should you require additional information on Severe Illness cover, please do not hesitate to contact one of our Private Wealth Managers at one of our NFB offices in Johannesburg, East London, Port Elizabeth, Stellenbosch or Cape Town.
Sources: The Independent on Saturday & Old Mutual
sensible finance Mar17
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