The link between the big four illnesses and the pandemic

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.

Illness cover claims stats

“The Old Mutual 2020 Claims Statistics report, which was recently released, reflects a 95% pay-out ratio for illness cover claims, adding up to a total of R871m,” says Jay Naidoo, Executive General Manager for Agency Franchise Distribution at Old Mutual.

Naidoo says 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%.

The link to COVID-19

“This increase in illness pay-outs corroborates a study by the World Health Organisation (WHO) last year, which found that people with 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,” Naidoo says.

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 minimise nonurgent facility-based care while tackling the pandemic.

The most common reasons for discontinuing or reducing services were cancellations of planned treatments and a lack of staff because healthcare 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,” Naidoo says.

The costs of big illnesses

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 illness insurance offers true customisation, total flexibility and immediate cover.

“When you contract an illness, there are numerous financial costs that you will have to address, including treatment. Old Mutual’s illness insurance ensures that those needs are addressed so that you can focus on the important things, such as your recovery and time with your loved ones,” Naidoo says.

“The role of the financial adviser becomes vital when a customer contracts an illness. The adviser steps in to help you access your pay-out, allocate money to the expenses incurred, and reinvest what is left. Your financial plan will also need to be revised to ensure that your new circumstances and your family’s financial needs are provided for,” he adds.

Jay Naidoo, Executive General Manager: Agency Franchise Distribution, Old Mutual