How much severe illness cover do I need?

Key takeaways

  • Assessing how much cover you need is difficult without knowing what illness you may contract. 
  • Severe illness cover is generally expensive and you will need to balance the cost against your need for cover.  
  • Take into account your age, health, family history, family support and other cover and savings you have. 

Working out how much you need is difficult because 
you may not know what you will want to use the benefit for until you fall ill. 

Care, if you contract Alzheimer’s disease, can run to tens of thousands a month while new treatments for cancer can run into hundreds of thousands for a year. You may need rehabilitation and/or time off after finding out you have a heart disease. 

On the other handsevere illness cover can be quite expensive so you want to minimise the cover you take out to ensure it remains affordableMany people take out severe illness cover purely based on what they can afford. 

A financial adviser should be able to help you work out a good balance, but you should give some thought to: 

  • How old you are – your risk of contracting an illness increases as you age; 

  • Indications in your family history that you may be susceptible to certain illnesses; 

  • How comprehensive your medical scheme cover is 

  • Whether you have gap cover insurance and whether it offers any cover for a cancer diagnosis, for example;  

  • How much disability cover and income protection, including temporary income protection, you have - these are essentials you should cover adequately first; 

  • Whether you have family support or would need care/child care/home help should you fall ill 

  • How much you have saved as an emergency fund; 

  • Whether you have savings outside of your retirement savings you could access should you need to. 

Some insurerallow you to decide at claims stage whether to take severe illness cover as a lump sum or as an ongoing payment or combination of either.