Insurance

As a medical professional you know better than most people that life is unpredictable and that your life can be changed in an instant by an illness or injury. It is, therefore, important to make sure that you protection in place if anything happens to you. In these instances, financial protection comes in the form of insurance.

Below is a breakdown of different types of insurance cover:

1. Life Cover

Life cover is insurance that pays out in the event that the person whose life is being insured dies. It usually pays out as a lump sum to your nominated beneficiary or your estate.

A person will usually need life cover for two main reasons:

  • To cover liabilities and meet any claims that may arise against your estate, including capital gains tax and estate duty.
  • To provide capital for dependents (beneficiaries) sufficient to produce the cash flow they require if they do not have you to provide an ongoing income anymore.
2. Income Protection

This type of cover is designed to replace the income that you would be incapable of earning if you were to be incapacitated due to illness or injury. This cover pays out as a monthly amount to help you cover monthly expenses when you are temporarily or permanently incapacitated due to an illness or injury, and therefore unable to work. You should have this type of cover in place for as long as you work and produce an income. When looking at income protection, bear in mind that your ability to earn an income is your greatest asset and should be protected.

3. Capital/Lump Sum Disability Cover

This type of cover is designed to provide you with a lump sum if you become disabled. You can then use the lump sum to pay medical bills, settle any outstanding liabilities, pay for any adjustments to your home or car to make it more accommodating to your condition, etc.

4. Critical Illness Cover

Critical illness cover is designed to pay out a lump sum if you are diagnosed with a critical illness such as cancer, heart attack, stroke, etc. Medical treatment can be unpredictable and expensive, so the aim is for the critical illness cover amount to pay for any medical and other bills that you may incur because of such an illness.

5. Medical Aid

As a medical professional, you probably have an idea of how expensive medical treatment can be. A medical aid gives you access to private health care that would likely otherwise be too expensive. Most plans have two main benefit categories.

  • The day-to-day benefits provide cover for day-to-day medical expenses, such as out-of-hospital doctors’ visits, optometry, dentistry, and prescribed medication.
  • The hospital benefit provides cover for medical expenses incurred in hospital.

Medical aids are generally not cheap, but with so many different schemes and options to choose from you can choose the plan that best suits your budget and requirements.

6. Gap Cover

There are, however, limits to what a medical aid will pay to healthcare providers for certain treatments, conditions, and procedures, that differ according to the scheme and plan you choose. Gap Cover can be helpful to cover the shortfall between the actual cost and what the medical aid pays for.

Conclusion

  • You should only buy the cover you need.

Insurance is an important component of your financial plan because it protects you against financial hardship caused by unforeseen events. To ensure that you are appropriately covered, you should consult with a qualified financial planning professional who will help you determine what your needs are and the appropriate level of cover required. 

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