The big difference between Disability Cover and Critical Illness Cover

I can’t decide - Disability Cover and Critical Illness Cover?

Of course you know our opinion on that - take both! But it’s not our opinion that counts; so here’s how to decide:

Which is better?

  • Disability Cover has one focus, and one focus only - your occupation.
  • Critical Illness Cover also has one focus – have you been diagnosed with one of the critical illnesses?

That’s it case closed, end of discussion. But hang on, surely there’s more to this than that?

Let’s look at the exact definitions for each of these:

Disability Cover

The Different Life Disability Cover will pay a single lumpsum IF:

You are totally and permanently unable to perform your occupation (or any other for which you are suitably qualified by skill, education, and training) due to a disability caused by illness, or injury

So let’s look at Illness only since Injury won’t apply to the Critical Illness Cover:

  • Cancer is an illness. This means it qualifies as a claim under the Disability Cover since it could result in you never being able to work again. On the other hand, you might very well be able to work again after suffering from cancer.
  • Heart surgery is performed because of an illness – usually a blocked heart artery. Once again it qualifies as a claim under the Disability Cover. After you’ve recovered, you might well be able to resume work again.
  • Heart attack? Same thing as above
  • Stroke? Same scenario. Think of the person totally paralysed as a result of suffering a stroke, who can never work again.

From where we stand, there’s a fifty-fifty chance of you being able to claim any of the above under Disability Cover. But we’d never recommend an ‘either or’ situation. If you had both forms of cover on your Different Life policy, you could have a payout under both sections – Disability Cover and Critical Illness Cover.

Cost should never be a factor in making your decision, but Disability Cover is a lot cheaper than Critical Illness Cover. Because of that you might want to buy a lot more Disability Cover than Critical Illness Cover.

The definition of Critical Illness Cover

The Different Life Critical Illness Cover will pay a lumpsum IF:

  • You are diagnosed with a stroke
  • Suffer a heart attack
  • Undergo heart surgery, or
  • Are diagnosed with cancer
  • As long as you don’t die within 30 days of the first diagnosis
  • All of which must be confirmed by our doctor

Here there’s no grey area around being able to work again – You’re either diagnosed with one of the abovementioned critical illness or you aren’t. So while the Disability Cover might not pay out if you are diagnosed with one of the critical illnesses mentioned - the Critical Illness Cover will.

The best advice would always be to have both.

Take John for example, who decides he’s only going to buy the Disability Cover.

He gets to retirement and now finds that the Disability Cover falls away. In between, he’s developed a few health concerns – high blood pressure and raised cholesterol – and now he wants to apply for Critical Illness Cover. Chances are good that he will either be declined or have some serious loadings applied to the cost.

Or Robin who decides to take out the Critical Illness Cover but not the Disability Cover.

He has massive kidney failure requiring dialysis. He doesn’t qualify for our critical illness payout since kidney failure isn’t one of the illnesses covered at Different Life. He would have qualified for a claim under Disability Cover if he was unable to perform an occupation for which he was qualified.

We offer as much as five million Rand in Critical Illness Cover at Different Life, but quite likely you could get by on far less.

Since Disability Cover is a lot cheaper, you could buy a higher amount of this. If it so happens that you can never work again, the Disability Cover would pay a lumpsum towards settling your debts and providing you with an income. A smaller amount of Critical Illness cover could take care of any unpaid medical bills and lifestyle adjustments which might need to be made.

Here are the pros and cons of each:

Disability Cover

The pros:

  • Cheaper than Critical Illness Cover Pays out if the claim is caused by both Injury or Illness

The cons:

  • Only pays if you cannot perform your occupation (Or any other occupation for which you have the skills or training)
  • Does nothing for you if you’re unemployed.
  • Falls away completely once you turn 65

Critical Illness Cover

The pros:

  • Pays out upon the diagnosis of stroke, heart attack, heart surgery, or cancer
  • Covers you for the whole of your life when you need it most

The cons:

  • More expensive than Disability Cover
  • Only covers the critical illnesses mentioned above
  • Does not cover injury

To answer your question right at the beginning - Neither of these can fully play the role of the other. You will need both.

We hope you enjoy how Different Life approaches life different from everyone else.



Posted in Insurance 101 on 10 Aug, 2017