Tuesday, March 27, 2012

Medical Aid - Big or Small?

It is also disconcerting to see how many people who can afford health cover like Liberty medical aid choose not to have their health covered. This is a major concern given the consistent rise in medical claims over the last few decades.
What is also troubling is the fact that many medical schemes have collapsed over the last few decades. Now, I am not talking about the big schemes, like Liberty medical aid. I am referring to smaller medical schemes.
The average medical aid client decides to join a smaller medical scheme to save some costs. I believe this is a big mistake. What these clients do not understand is that smaller medical schemes are stricter when it comes to actual claims. They have to be. Their income (like premiums) is usually not high enough to support the claims that come in. That is the reason why they will do everything in their power to keep their claim count as low as possible and to grow their premium income as much as possible so that they can get a secure financial footing in the industry.
However, when you deal with bigger medical schemes like the Liberty medical aid you do not have to worry about this. These industry giants can easily absorb the financial impact that claims have on their finances. As a rule, medical aids should have a solvency ratio of twenty five percent. This figure shows whether the medical scheme in question will be able to pay claims or not. If the solvency ratio drops to below twenty percent it is advisable to stay away from such schemes.
Bigger medical aids also do not have any hidden terms and conditions. When you are dealing with a medical scheme industry leader, transparency is prevalent. Organisations like Liberty medical aid know that this niche is very competitive and sensitive. If people do not trust your advisors or your way of doing business, you will have to close your doors. These industry leaders understand the importance of transparency. Therefore, 'underwriting' takes place while the advisor sits with you. He asks a lot of questions so that he can give you a fair and accurate quotation based on the facts given. In this meeting you will know exactly how much commission and administration costs you pay per premium.
I know a lot of people want to save that extra $10 or $20 dollars when it comes to medical schemes. I have found that it is not worth it when you consider the risk you take just to save a couple of dollars. Stick with the leaders like Liberty medical aid and you will be safe.

No comments:

Post a Comment