“Medical aid is for hypochondriacs”: Do I really need medical insurance?
“I don’t need medical aid. I eat organic quinoa, I run twelve times a week and I take my vitamins. I look after myself. Hospital insurance is for the weak.”
Cool story, bro. But before you choke on your dinner, get run over by a taxi while jogging across the road, and develop acute hypervitaminosis, you might want to consider the medical insurance policies available in South Africa.
South Africa offers life-saving public healthcare to its citizens, and our doctors are heroic and hard-working. However, the unfortunate reality is that South African public hospitals are understaffed and severely underfunded. A reliable medical aid or hospital insurance plan will ensure that you get essential medical treatment as soon as you need it and that your hospital stay is comfortable.
Considering the shortage of funding in South African government hospitals, it is no exaggeration to say that in some cases, hospital insurance can save your life.
If you elect to have a major medical procedure at a private hospital without adequate insurance cover, the medical costs can be financially disastrous.
You’ve scared common sense into me. But I can’t afford medical aid.
You don’t necessarily need a comprehensive medical aid scheme with medical savings.
In fact, if you’re young and generally healthy, it may be prudent to take out a basic medical insurance policy, one that will cover you for critical care and hospitalisation. You don’t necessarily need all the bells and whistles, such as a medical savings programme.
However, take careful note of how much cover you are actually getting. A hospital plan that pays a daily cash sum in the event of hospitalisation is no substitute for adequate medical aid cover.
Private care for a serious illness can be extremely costly – way in excess of the payments made by hospital plans. It is imperative to ensure you have adequate medical insurance that will cover the costs of your hospitalisation and treatment. This will ensure you receive the highest standard of treatment and protect you from a crippling financial burden. Make sure that you understand exactly how much medical care your insurance plan will cover and ask about any exclusions.
For many people basic, no frills medical aid is all you need. But there is a world of difference between basic but adequate medical cover and a cheap policy that will let you down when you really need it.
That does not mean that you need medical aid cover for every possible procedure. Some kinds of non-critical elective scans may not be covered by basic medical aid polices. That may not be reason to choose more expensive cover.
Medical aid is an investment in your health, financial security and peace of mind. If in doubt about the kind of cover you need for your lifestyle, speak to your doctor and an insurance broker and make a considered decision.
Choosing an insurance broker
Why is fine print even a thing? In a more perfect universe, every insurance policy would have each exclusion and caveat and clause written in 40-point red ink on the front cover.
We do however live in a world of darkness without hope or consolation. We stand alone in a cold and hostile universe that doesn’t care whether we succeed or fail.
Sorry, I’ve been watching True Detective. The world is really a very nice place, full of sunshine and puppies. Nevertheless, the fact is everyone is out to make a buck – including insurance companies.
Look, you’re obviously smart and charming and like to do your research, but you’re just one person against a profit-making machine. Even a good-looking intellectual like you can miss something important. It’s just that you lack the experience, is all.
That’s where an insurance broker can make the difference.
A good insurance broker should work hard to find the best deal especially for you. If you’re old or young, male or female, live in a gated community or a warzone, watch hurricanes from your window or never see rain, your broker will assess these factors and try to leverage them so you can obtain and secure an insurance policy that is as affordable as possible.
Getting the right level of insurance cover
Getting the cheapest price is arguably not an insurance broker’s most valuable role. It’s no big deal paying low insurance premiums if you’re not getting value in return.
An insurance broker who does her job properly will consider your background, your income, whether you have dependents or are a lone ranger, and help you choose insurance policies that will really help you. The key is not to pay for insurance you don’t really need, but also to make sure you have cover that will protect you in the event of unforeseen setbacks. In getting this balance right, your insurance broker is your best friend.
Yet you said everyone is out to make a buck. Why should I trust brokers any more than insurance companies?
Excellent question. Insurance brokers are ordinary, fallible humans, just like you and me. And they’re in business to make money. But many insurance brokers are also reliable professionals who will work hard to get you the best insurance cover. They make money + you get the right insurance = everyone wins.
Things to look out for when choosing a broker:
- Make sure your broker has partnered with an established and credible insurer. This is important for two reasons. First, top insurance companies are discriminating about which brokers they deal with, only choosing those with the right credentials and track record. Second, and no less important, it is essential that your insurance policy is underwritten by a trustworthy firm that will be able to meet its obligations
- Find a broker who will take time to advise you on products and who won’t push products you don’t need. If an insurance broker tries to make you buy policies you don’t want, take your business elsewhere.
- On the other hand, a good broker will help explain why it may be prudent to take certain policies you didn’t think were important. Is your household contents insurance adequate? A good broker will tell you when you risk being left short.
- Choose a broker with expertise that matches your needs. If you need insurance for your business, you need a broker who has experience in the field. For specialised products such as maritime insurance, it is important to find an insurance broker with a track record of negotiating that specialised aspect of the insurance business.
- Does your broker take an interest in your needs? Will your broker take the time to research the best insurance deal for you or your business?
- An insurance broker should be available to take your calls and to answer all your questions at all times.
Take time to speak to a number of different insurance brokers. Find out how big the team is, and whether they have the resources to handle your questions and find you the best deal. Get insurance quotes from a range of brokers. You can also request quotes directly from many insurers and enquire whether your broker can improve on those deals.
Don’t be afraid to say no to policies you don’t want or to take your business elsewhere.
Small Business Insurance: Who needs it?
Do you need business insurance? Take our quiz!
Question 1: Do you own a business?
There is no question 2. If you own a small business, it is imperative to have some level of insurance cover.
What kind of policies you will need, and what level of cover is recommended, will vary according to the type of business, how many people you employ, what kind of premises you are operating from, and well as several other variables.
Here are some vital types of commercial insurance to help you make an informed decision about purchasing insurance policies for your home office or small business.
- Building insurance and business contents insurance. It is prudent to get insurance cover both for your business premises – owned or rented – and insurance covering office contents, including equipment vital for the running of your business. The more comprehensive such cover is, the more reliably protected you are against risk. However, comprehensive commercial cover comes at a higher monthly premium.
- Car and fleet insurance. Whether your employees are travelling to make sales or your business involved transporting goods, fleet cover can offer protection against damage to company vehicles and against loss due to theft. No less important, protects your business from liability if an employee is involved in an accident in a company car.
- Commercial liability insurance. General liability insurance offers financial security in the event of claims against your employees or business for property damage, causing accidental injury to members of the public, and, in some instances, costly legal proceedings.
- In addition, specialised professional liability cover may be required for liability incurred in the course of undertaking one’s professional duties. This type of insurance can be costly, but the premiums need to be weighed against the enormous liability a practitioner can face in the event of a professional accident or error.
- It may also be prudent to insure business items that are taken outside of the office. If employees engage in regular international business travel, worldwide coverage may be desirable.
If your company is involved in an industry that requires specialised business insurance – such as maritime insurance or crop insurance – it is often wise to consult a knowledgeable insurance broker with experience in the industry.
Insurance, risk and the art of business
Bear in mind that insurance is one component of an overall business risk strategy. Choosing the type and level of commercial insurance for your business should be part of a holistic risk-management approach. Adequate business insurance can help reduce general business risk. Equally, lowering risk – for example, with effective safety and security measures – can reduce business insurance premiums.
Choosing commercial insurance is a business decisions like any others. Entrepreneurship means managing risk. Consequently, the cost of insurance must be weighed against actual risks and your appetite for risk. Many savvy entrepreneurs will choose not to be overcautious and to reduce business insurance costs as far as possible. However, whatever your goals as an entrepreneur, calculated risk should not be confused with exposing your staff and business to needless loss. In business, as in life, there is a fine line between confidence and recklessness.
Deal with an insurer your business can depend on
Commercial insurance cover is only as good as the insurer underwriting your policy. As with any policy, select a reputable insurer with a proven track record. There are additional business-specific considerations, too. One of the most pressing is: How quickly will your claim will be settled? Small businesses depend on reliable capital flow. Business insurance is not very helpful if there are inordinate delays between suffering a loss and receiving financial compensation. A good business insurance policy will offer small businesses consistent and reliable service, allowing business to run normally as possible.
Focus principally one the meat and potatoes of your policy. Don’t be bamboozled by frills like no claim bonuses and rewards. These extras may add value, but should be included as part of a rational analysis of the costs and benefits of each policy. A no claim bonus is well and good, but the whole point of insurance, after all, is to be able to claim when you need it.
Compare business insurance quotes from a range of different insurers. Remember, a quote comes with no obligation to purchase.