Critical illness insurance was firstly originated in South Africa. The idea of having a critical illness insurance in South Africa appeared from a discussion between a cardio-thoracic surgeon. Mr. Barnard and the chief executive of a life office. Critical illness insurance was forced to be brought send as the express health system lacked measures to cover the cost of a be of serious illnesses. Let’s have a be at how critical illness insurance evolved down the years in South Africa.
According to Munich Re. 2000 when in 1983 critical illness insurance first appeared nearly all covers could have been riders to life insurance. The highest benefit paid could have been less than R 25,000 (USD 4,000) and 25 percent of life cover. This amount was chosen because it could have been the cost for the treatment of coronary artery bypass conjoin. Nowadays most of the critical illness policies in South Africa could be prepayment that is acceleration. The maximum individual cover provided could be R 550,000 (nearly USD 80,000) while bigger companies could furnish up to R 800,000 (approximately USD 120,000). In the year 1990 critical illness sales may have been higher than any other policies as it can be estimated that around 60 percent could have been combined to new policies. Also recent sales could be estimated to be around 50 percent less than in 1990.
Moreover at first critical illness policy covered 4 main critical illness conditions. These could be classified as follows: heart attack stroke cancer and coronary artery bypass surgery. But as evolution and competition in the insurance merchandise increased the critical illness conditions covered gradually became five. Similar to other countries the trend could almost be considered the same. As time passed by the be of cases covered then became more than twenty. As per O’Mahony S. 2001. “South African dread disease inform” most companies may cover up to 8 core out critical illness conditions and 21 extended conditions. Extended cases may be surgeries like aviate angioplasty or states of health such as total and permanent disability.
Furthermore critical illness cover can be quite expensive in South Africa. There may be thus two sales channels that act the critical illness sales tasks. The life office agents change critical illness plans to those who acquire less. On the other hand the brokers sell to those who acquire a high income. As a be of fact most critical illness sales undergo been reported to go from the negociate merchandise due to its expensive determine. According to Munich Re. 2000 there may be around 14 life insurance companies that furnish critical illness cover. This may account for around 70 percent of all life insurance companies in South Africa. It can be interesting to note that nearly all the life insurance companies do not offer standalone critical illness covers. They may be most of the measure sold as riders.
Critical illness insurance market in South Africa had become develop quickly. The merchandise in USA or Canada may still be in process to reach a real peak in contrast with South Africa or even the UK.
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