We all know and appreciate the costs of private healthcare which is why most of us take steps to protect ourselves financially. However, it is often difficult to prioritise healthcare expenditure or to assess the need for certain products in one’s portfolio.
In addition to covering the regulated PMBs, medical aids vary greatly in terms of the benefits they offer and navigating the open medical scheme market and the various plan options on offer can be overwhelming. Entry-level medical aid options include basic hospital cover at 100% of medical aid rates, with network options generally being more cost-effective.
More comprehensive medical aids provide insured benefits for out-of-hospital medical costs, although such benefits generally kick in once a pre-determined threshold of expenditure has been reached and are subject to annual limits. More comprehensive plan options may also provide additional benefits in respect of scopes, scans, radiology and pathology which can be unaffordable if required on an outpatient basis.
Traditional disability assurance, which is based on whether or not you are physically able to work following a disability, is generally divided into own occupation, own or similar or reasonable occupation, and any occupation insurance. On the other hand, functional impairment pays a lump-sum benefit on the occurrence of a pre-defined event that limits your ability to carry out physical functions.
Functional impairment benefits are tiered and take into account the importance of the body part you can no longer use, bearing in mind that the impairment must be permanent. To measure functional impairment, consideration is given to your ability to perform daily activities. Generally, a functional impairment policy will pay a percentage of the amount for which you are insured, depending on the severity.
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