Severe illness pay-outs increased over the last year and are likely to continue to reflect increased pay-outs over the next year as a direct consequence of reduced services and increased fears around the Covid-19 pandemic.
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The claims stats Old Mutual released recently reflect a 95% pay-out ratio for severe illness and physical impairment cover adding up to a total of R871 million.
The illness pay-out amount increased 18% from the previous year. Cancer and tumours accounted for the largest proportion of illness claims at 45%, followed by cardiovascular disorders at 27% and central nervous system disorders at 14%.
This increase in severe illness pay-outs corroborates a study by the World Health Organisation (WHO) last year which found that people with severe illnesses such as cancer and cardiovascular disease were not receiving the health treatment they needed since the Covid-19 pandemic began. Reasons included disruption of health services and a reluctance to enter the medical environment for fear of the increased risk of contracting Covid-19.
The survey, which covered 155 countries found that the postponement of public screening programmes such as mammograms (breast cancer) and pap smears (cervical cancer) was also widespread, reported by more than 50% of countries. This was consistent with initial WHO recommendations to minimize non-urgent facility-based care whilst tackling the pandemic.
The most common reasons for discontinuing or reducing services were cancellations of planned treatments and a lack of staff because health workers had been reassigned to support Covid-19 services. Bente Mikkelsen, Director of the Department of Noncommunicable Diseases (Severe Illnesses) at WHO said it would be some time before the full extent of the impact of the healthcare disruptions could be determined, with specific reference to patients with severe illnesses.
While exposure to Covid-19 could be devastating for someone with a severe illness, not addressing their medical needs could be just as fatal.
Old Mutual found that the Big Four illnesses (cancer, heart attacks, strokes, and coronary artery bypass grafts) contributed to 70% of the illness claims paid in 2020. Old Mutual’s severe illness cover offers true customisation, total flexibility and immediate cover.
We paid a total of R147 million in terminal illness claims to customers while they were still alive so they could make the most of their last moments with their loved ones. When you contract a severe illness, there are numerous financial costs that you will have to address, including reduced income. Old Mutual’s severe illness cover ensures that those needs are addressed so that you can make the most of your last moments with your loved ones.
The role of the financial adviser becomes vital when a customer contracts a severe illness in terms of helping them set aside their emotions and start revising their financial plan to ensure that their health needs are addressed and their families are financially provided for.