The critical illness insurance market in South Africa may have been a significant one in the history of critical illness insurance. Critical illness insurance had been an origin of South Africa and was gradually propagated around the world. Nowadays, critical illness cover can be considered as one of the most sought insurance policies worldwide. According to Munich Re, 2000, the extent of life policies accelerated with critical illness may have been in decrease these days.



As per Munich Re, 2000, during the late 1980's around 60 percent of life policies could have been related with critical illness. Nowadays, this value may have decreased to 25 percent. However there is a reason that may explain this fact. In South Africa, major medical expenses (MME) policies may be taken out as an additional benefit to cover health expenses. The MME can account for the lack of facilities provided by the healthcare system in South Africa. By doing so, some people may have lost interest in critical illness insurance. Furthermore, the MME cover may be much affordable than critical illness insurance. It may also provide cover for many conditions unlike critical illness cover where the conditions are restricted to a certain number. MME can also be offered as a family protection plan.

Moreover, insurers may have encountered another problem after the introduction of critical illness cover in South Africa. There had been an elevated number of claims recorded soon after the start of policies. As the majority of early claims mat have been for multiple sclerosis and cancer, it may be assumed that many people self diagnosed the disease before buying a critical illness cover. As a matter of fact, underwriting may have thus been unable to unveil these illnesses. The claims may have therefore been rejected. As a measure of precaution, some policies had included a waiting period. The waiting period may disallow payments to be made quickly. Some waiting period may even reach around six months and can also be applied to specific illnesses like cancer and multiple sclerosis.

Additionally, the introduction of standalone critical illness cover in the South African market may not have been successful. Its high price tag and the toughness of certain rules regarding definitions of certain illnesses may have led standalone critical illness cover to unpopularity. Also, problems related to legislation and tax may have further complicated the product design and thus obliging its pricing to stay high. Looking at this, people may have rather preferred to choose life insurance related critical illness or mortgage related critical illness covers. There may be no company that offers standalone critical illness cover nowadays in South Africa.

As seen above, there may have been a relative downfall in critical illness insurance in the South African insurance market. People have discovered about the MME. But is the amount of cover as significant as with critical illness cover? A vital point still remains that critical illness cover may not only save one's life but may also help to accommodate the person and his family with his changed lifestyle.