As a financial planner, you are a trusted adviser in helping your clients achieve their financial goals and safeguard their financial well-being. Having a structured plan in place for them covering investments, retirement planning, and risk management is vital, and medical scheme cover forms a critical part of this.
However, medical scheme cover is no longer enough on its own to provide comprehensive protection against unanticipated out-of-pocket medical expenses.
Medical expense shortfalls are becoming increasingly common, and they can be significant. Over the course of a lifetime, these events have the potential to derail financial plans and future security. Gap cover provides protection against these shortfalls, making it an essential component in an inclusive financial planning strategy.
Unanticipated medical expenses can derail even the most meticulously structured financial plans, and shortfalls, co-payments, and sub-limits are increasingly common, even on comprehensive medical aid plan options. This can result in out-of-pocket medical expenses of potentially tens of thousands of rands for a single event, but these are rarely isolated incidents. Often, these single events can lead to a cascade of additional claims. Over a lifetime, these add up to significant amounts of money.
At Turnberry, we have seen lifetime claims of more than half-a-million rand for a single client – R529 598.61 to be precise. We also have lifetime claims totals of R450 224.52, R437 464.33, R398 585.02, and R395 882.08, and these are only the top five.
These are sums of money that could potentially force clients to make difficult, short-term financial decisions that can disrupt their overall strategy. Whether it’s dipping into retirement savings, taking on debt, or even delaying important life goals such as education or homeownership, the ripple effects of medical expense shortfalls can be profound.
Safeguarding your clients’ financial future
Financial advisers have a duty to ensure that their clients’ financial health remains intact, regardless of the challenges they face. When crafting a financial plan, it is essential to consider both their current and future financial landscape. Medical scheme cover remains a crucial component, but it often falls short in covering the full spectrum of medical costs. This is where gap cover becomes an invaluable addition to a comprehensive financial plan.
Gap cover is a cost-effective way for brokers to protect their clients’ financial strategy, ensuring that they can access the healthcare they need without being guided by financial constraints and that they will not have to tap into their long-term savings or retirement funds to cover unexpected medical expenses.
Incorporating gap cover into clients’ financial plans not only helps to protect their finances but also to preserve their peace of mind and the integrity of the bigger picture.
It is important to remember that medical scheme plans change every year, and the offerings from gap providers change in tandem to align and deliver effective cover. It is crucial to stay informed about these changes to provide the best possible advice to your clients and to understand the importance of gap cover in comprehensive financial planning.
Gap cover is more than just an add-on to medical scheme cover; it is a strategic safeguard that protects your clients from the financial fallout of unanticipated medical expenses.
Gap cover serves as a vital piece of risk management, offering a buffer against the uncertainties of medical expenses and ensuring that your clients’ financial plans remain on track.
Tony Singleton is the chief executive of Turnberry Management Risk Solutions.
Disclaimer: The views expressed in this article are those of the writer and are not necessarily shared by Moonstone Information Refinery or its sister companies. The information in this article does not constitute financial planning advice that is appropriate to every individual’s needs and circumstances.
