Choosing critical-illness cover
The range of diseases covered by critical-illness policies differs from life assurer to life assurer, but they all provide cover for the four most common conditions: cancer, heart attack, strokes and coronary-bypass grafts for heart disease.
But if a disease such as rheumatoid arthritis or Alzheimer's, for example, runs in your family, consider this when choosing your policy.
Also look at the level of cover paid out on diagnosis of a severe illness. Some policies pay out the full assured amount on diagnosis, while others pay out a percentage of the amount, depending on the severity of your illness - payments known as tiered benefits. These benefits typically pay out 25% , 50% or 75% of the insured amount.
Some life assurers offer policies with a single cover amount, and each claim decreases the cover left. If you had a R1-million policy and were to make a claim of R250,000 for cancer, you could make another claim of up to R750,000.
Other insurers offer cover reinstatement, whereby you can make multiple claims against the same policy without depleting the cover amount. The level at which your policy pays out can determine if you can claim more than once for the same illness.
Member companies of the Association for Savings and Investment South Africa are required to include a standardised critical-illness disclosure grid in your policy quotation to help you make meaningful comparisons between insurers.
Contract with a life assurer with a high claims payout ratio - one that looks for reasons to pay claims, said Jaco Gouws, protection product head at Old Mutual. An adviser should help you in this.