When you are just starting out in the workforce, financial planning is critical to making the most of your earnings. Part of your financial planning should always include medical cover. In South Africa, accessing quality private healthcare means you need medical aid, but this is increasingly expensive, and as such, gap cover has become essential in balancing cover with limited budgets. Gap cover is a vital part of ensuring financial and physical well-being, and talking to your broker about the right options for your needs will help you avoid financial risk and set yourself up for the future.
Balancing cost and cover
While in the past, employers may have subsidised medical aid contributions, this is increasingly uncommon due to affordability factors. Comprehensive medical aid coverage now costs many thousands of Rands a month, which means it is simply not a feasible solution for many just starting out in the job market. In addition, most people entering the workforce are young and healthy, which means they need cover for accidents and unforeseen illnesses, but not necessarily enough to justify the premiums of comprehensive plans.
Entry-level medical aid options such as hospital plans are often ideal, but with the reduced premium comes an increased likelihood of medical expense shortfalls, as well as co-payments and sub-limits. This is where gap cover is an invaluable addition. It offers an affordable way of augmenting medical aid coverage and reducing financial risk.
Advice on affordability
Medical aid is something that is often seen as a luxury, but for those with the income to afford it, it is a vital investment in your health and your financial future. State healthcare facilities are understaffed and have long waiting periods, especially for elective surgeries and treatment for illnesses like cancer. In addition, despite popular belief, they do not provide free healthcare; the cost of your treatment is directly proportional to your earnings, so those with higher salaries will end up paying higher amounts. With medical aid, you have access to treatment at private facilities, even if these are within a specified network.
However, it is important to remember that with entry-level medical scheme options, there is an increased risk of shortfalls in cover. Shortfalls in excess of R50 000 are not uncommon today, and these are not even seen by gap cover providers as large claims. Affordability is a critical part of the decision-making process; it is essential to get the best coverage for your budget, and gap cover can be a lifesaver and a saviour for your financial future. A financial advisor or broker can help you find the most cost-effective options for your circumstances and your budget and match gap cover to medical aid cover effectively.
About Turnberry Management Risk Solutions
Founded in 2001, Turnberry is a registered financial services provider (FSP no. 36571) that specialises in Accident and Health Insurance, Travel Insurance, and Funeral Cover.
With extensive experience across healthcare and insurance industries in South Africa, Turnberry offers unsurpassed service to Brokers and clients. Turnberry’s gap cover products are available to clients on all medical aid schemes, as they are independently provided and are therefore transferable in the event of a change in the client’s medical aid scheme.
Turnberry is well represented nationally, with its Head Office based in Bedfordview, Johannesburg with Business Development Managers in Cape Town and Durban. The Turnberry Team’s focus on outstanding client service comes from having extensive knowledge and experience in the financial services sector and is underwritten by Lombard Insurance Company Limited. Lombard Insurance Company Limited is an Authorised Financial Services Provider (FSP 1596) and Insurer conducting non-life insurance business.
Opinion piece by Brian Harris, General Manager Operations at Turnberry Management Risk Solutions.
