How advisers can help clients beat the costs of critical illness

A cancer diagnosis, heart attack or stroke can change a client’s life in an instant. While medical aid may cover many treatment costs, the financial impact often extends far beyond hospital bills. Lost income, childcare, specialised treatments and ongoing care can place enormous pressure on clients and their families at a time when they should be focused on recovery.

This is where dread disease cover can play an important role. Yet despite the growing prevalence of critical illnesses in South Africa, most earners remain significantly underinsured. The result is a major opportunity for advisers to help clients protect their finances and maintain their quality of life when faced with a serious illness.

Dread disease cover in SA: woeful underinsurance

The 2025 Asisa Gap study looked at the coverage of dread disease among the 16.1 million earners in South Africa and found a significant underinsurance. The study, which includes both personal and group benefits, found that coverage is around 26%. With a need of a total of R1.1 trillion cover among all earners, this amounts to average cover of R56 000 per earner.

Is there a need for more cover?

This requires looking at the likelihood of being diagnosed with a critical illness and the costs associated with the illness.

Likelihood of a critical illness diagnosis

This number is high.

• 66 critical illness events occur each day, or 24 097 per year, the 2025 Gap study estimates
• 1 in 8 women and 1 in 7 men will develop cancer in their lifetime, according to CANSA and National Cancer Registry stats
• The number of cancer cases is expected to double, from 2020 to 2040, according to the World Health Organisation
• More than 1 in 3 adult South Africans live with hypertension, one of the leading causes of heart disease according to the Heart and Stroke Foundation of South Africa, and 45% are younger than 35 years

Of course, having a healthy lifestyle helps, but it isn’t enough. For example, WHO says that a quarter of deaths from cancer are due to tobacco use, alcohol consumption, high body mass index, low fruit and vegetable intake, and lack of physical activity. That leaves 75% caused by other factors.

Treatment costs of a critical illness: medical aid may need a top up

The cost of a critical illness varies widely. While a mild heart attack could be treated in hospital and early-stage cancer treatment costs covered by medical aid benefits, there are many additional treatment and care costs not covered by medical aid.

For example, a PET/CT scans can cost between R30 000 and R56 000. Combine that with a stay in hospital, and a recommended course of biologics in addition to radiation and the costs are over R200 000. Even “older” biologic drugs such as Keytruda have a cost of over R100 000 that is only covered by the top-tier plan medical aids.

Bottom line: a good medical aid will pay a lot of treatment costs, but self-funding may also be necessary. Gap cover can cover some of these costs but total annual benefits are limited by legislation, and they will only pay for medical costs.

The hidden costs of critical illness

Paying for treatment is one side of costs, the other is equally big and not funded by medical aids. These can include transport to treatment facilities such as radiation and chemotherapy providers, food for dietary requirements, childcare, counselling and more. Lost income may also need to be replaced.

In a Zurich UK Report on the Hidden Costs of Cancer, only 20% of respondents said their diagnosis had no impact on their finances. Encouragingly, 27% said their life had been made easier by a payout from a critical illness or income protection policy. For the rest:

• 13%: biggest worry was how to cover their mortgage payments
• 26%: borrowed money from family and friends
• 25%: sold assets to fund care costs
• 19%: used short-term loans for care costs

And as for working after diagnosis and treatment? 25% of respondents said they had stopped working completely and 32% were working part time. Less than a quarter (23%) had no change in their employment status.

Sadly, the hidden costs seem to be higher the younger the diagnosis. A Canadian study found that young adults who survived cancer faced a lifetime penalty of CAD35 000.

R56 00 critical illness cover is just not enough.

Covering the costs of a critical illness diagnosis with dread disease cover

Not everyone is going to be diagnosed with a dread disease, but the consequences of being one of the 66 on any day can be financially devastating unless there is cover that will pay a lump sum on diagnosis.

Keys to look for in a policy are:

• Cover that matches your client’s needs, age and gender, keeping in mind that diseases such as heart attacks are as likely for men than women, but cancers such as breast cancer is more likely among women.
• Easy to understand pay-out levels and claim guidelines. Critical illness cover is notoriously complicated to understand with most clients only knowing whether they are covered or not and for how much when they claim.
• Clear waiting period and conditions explanations, such as one month from official diagnosis and survival period.
• Clarity on multiple claims, whether different diagnosis occur simultaneously or years apart.
• Whether cover is stand alone or a benefit to another cover such as life cover, and any implications of this such as reduced payouts.
• Affordability and flexibility – always a must in risk cover products so that as client needs change cover can change.

Help your clients cope with change

A dread disease diagnosis changes a client’s life, a critical illness policy can help them cope with that change. Advisers can help clients understand the need for cover and the many benefits it offers, while explaining the most critical terms and conditions to ensure clients have the cover they need, when they need it.