Cancer leads 'big four' in claim payouts
Disease's prevalence underlines why life assurance, medical cover are essential
Cancer is the leading cause of most claims paid by Old Mutual, the latest claims statistics released by the life assurer earlier this month show.
Old Mutual's stats, which corroborate those released by Liberty and Momentum earlier this year, highlight the importance of adequate cover for the risk of getting cancer.
Life assurers' claims stats provide an analysis of claims paid for death cover, severe-illness and physical-impairment cover, and disability cover.
Cancer and tumours were the biggest category (25%) of claims for death cover from Old Mutual in 2016, followed closely by cardiovascular disorder (24%).
Old Mutual's statistics show that cancer and tumours were the biggest cause of death claims among women last year, while cardiovascular diseases were the biggest cause of death claims among men.
Of all severe-illness claims paid by Old Mutual last year, 81% were for the "big four" - cancer, heart attack, stroke and heart bypass surgery - with cancer claims accounting for the lion's share at 64% of these.
Likewise, cancer was the main cause of all claims by Liberty clients from all life stages except for empty nesters, the life assurer reported. Cancer accounted for 15.2% of claims by young achievers (young people who have yet to start a family), 24.4% by young parents, 26.2% by established providers (people well into their careers and family lives) and 23.31% by empty nesters.
The most common type of cancers for women were breast and, for men, prostate cancer.
Cancer accounted for 34% of severe-illness claims paid out by Momentum in 2016, and cardiovascular disease accounted for 23% of severe-illness claims paid.
Old Mutual's claims stats showed that cancer and tumours accounted for only 15% of claims for a disability lump sum, and 10% of claims for a disability income last year.
With advances in medical science, our chances of surviving a severe illness without being permanently disabled are higher, which is why income protection and disability lump-sum payouts for cancer are lower than those for severe illness.
You should first take out life assurance to cover you and your dependants in the event that you are disabled or die before retirement. You should also ensure that you have good medical cover for the medical expenses related to a severe illness such as cancer.
Severe-illness cover - also referred to as dread-disease or critical-illness cover - gives you greater options when you get such an illness and ensures you are not exposed to financial risks if you become ill without being permanently disabled.
Since we're living longer than our forefathers and detection of illnesses is improving, we have an increased likelihood of suffering a severe illness.
A severe-illness diagnosis could easily tip you and your family over the edge, according to Hennie de Villiers, deputy chair of the Association for Savings and Investment South Africa life and risk board committee.
"Developing a critical illness could mean that your family loses a breadwinner while you are receiving treatment. You could also face a range of additional expenses," he says.
A severe-illness payout can give you treatment options beyond those covered by your scheme, the opportunity to slow down your career, or time off to recuperate. It may also be useful if you incur additional childcare or home-help costs.