BUSINESS NEWS - There’s a common misconception of what critical illness benefits are and how they function. The truth is, this perception stems from a limited understanding of the benefit’s true purpose. 

For decades, critical illness cover has been positioned as a catastrophic safeguard protection against life’s worst-case scenarios. But that view no longer serves today’s reality. 

The real challenge isn’t the illness itself, but the potential financial vulnerability that follows. As an industry, we have an opportunity – and a responsibility – to redefine the narrative: to move beyond fear-based protection and focus on financial resilience and recovery.

Both financial advisers and their clients need to reframe critical illness cover, not as a mere survival mechanism, but as a vital safeguard for financial well-being, grounded in the belief that no one should be bankrupted by the cost of recovery from a critical illness.

Modern medical advancements have dramatically improved outcomes for serious health events. Conditions such as cancer, cardiovascular ailments and strokes are no longer automatic death sentences and are increasingly treatable. Yet, this medical success often masks a looming financial disaster.

According to Momentum Life Insurance’s 2024 claim statistics, cancer was the leading cause of critical illness claims, accounting for approximately 45% of payouts, followed by cardiovascular conditions, nervous system disorders (including strokes), and musculoskeletal conditions. 

In total, Momentum Life Insurance paid out R6,6 billion in claims last year, a figure that represents far more than policy documents and statistics. It reflects real people, real income streams, and the vital role financial protection plays when life takes an unexpected turn.

This is not a tale of rare, sudden catastrophe; it’s a predictable, widespread reality.

The core financial threat is the long-term strain of recovery: lost income from extended unpaid leave, specialist co-payments, mandatory rehabilitation, home care expenses, and necessary lifestyle adjustments. 

These costs rapidly erode savings, deplete investment portfolios, and derail carefully planned retirements.

For financial advisers, the shift in perspective must be immediate and decisive. The advice conversation should move away from the uncomfortable question, “Will I get sick?” to the far more responsible and actionable question: “What is my ‘Life Happens’ plan for cash flow during recovery?”

This reframing positions the adviser as a proactive risk manager. Critical illness cover is an instrument designed to inject substantial, tax-free cash at the moment it’s needed most, protecting the client’s existing wealth and income stream from the devastating secondary effects of a health crisis.

If critical illness cover is cash-flow protection, then it should be considered mandatory for every client portfolio. This urgency extends beyond just the primary breadwinner. A child’s critical illness, for instance, may require a parent to take extended leave or step away from work entirely. 

By including cover for children, the adviser is protecting the parental income stream, which is the financial bedrock of the family.

The new generation of risk planning demands that we look beyond survival. Policies should be structured to pay out when they are needed most, offering comprehensive and accelerated benefits to cover the full spectrum of conditions, from early-stage to severe.

Survival is not the finish line. It is the beginning of a financially draining recovery marathon.

It’s time for financial advisers to ensure that every client’s plan doesn’t just cover survival – it should safeguard recovery.

Article: Joretha Bothma, Head of Product Innovation, Underwriting and Claims at Momentum Life Insurance

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