Point of view: why critical illness cover is essential

Critical illness cover is still treated as a luxury in South Africa, something for the wealthy or overly cautious, rather than a financial necessity. Yet actuarial estimates show that more than 24 000 formally employed South Africans will be diagnosed with a serious illness like cancer, a heart attack or a stroke in 2025. Despite this, over 85% of income earners have no critical illness cover at all.

I used to be one of them. Like many others, I assumed that medical aid would be enough. It wasn’t until a close friend, healthy, active, and in her early 40s, was diagnosed with a serious illness that I realised how quickly life can change. She had to take extended time off work, and while her medical aid covered some of the treatment, it didn’t come close to covering everything. The financial strain was immediate. Her family had to dip into savings, take out loans, and rely on support from friends. It was a wake-up call.

The 2025 Insurance Gap Study by ASISA and True South Advisory includes critical illness cover for the first time. According to actuary WS Nel, who led the research, this marks a significant expansion of the study’s scope. But unlike death or disability cover, it’s not possible to calculate a precise insurance gap for critical illness. That’s because people often return to work after recovery, and the financial impact varies widely depending on the illness, treatment, and personal circumstances.

Nel explains that critical illness cover is designed to provide a lump sum payout when someone is diagnosed with a serious condition. It’s meant to help with lifestyle adjustments, medical shortfalls, and treatments not covered by medical aid. It’s not about replacing income permanently; it’s about staying afloat during recovery.

South Africa was the first country to introduce critical illness products in the 1980s, thanks to Dr Marius Barnard, who saw the financial devastation that followed major health events. Yet decades later, the uptake remains low. At the end of 2024, South Africa’s 16.1 million formally employed income earners generated R4 trillion in gross earnings, but their critical illness cover amounted to just R1.1 trillion, a coverage ratio of 26%.

And the gap is not evenly spread. “We believe that in the case of critical illness cover, estimating an average cover per income earner distorts the reality of a highly uneven distribution,” says Nel. “More than 85% of earners have no critical illness cover, while a small minority hold high levels of cover.” The wealthiest 20% of earners have a coverage ratio of 31%, and those with university degrees are the most likely to have policies.

This is even though critical illness is one of the most relatable risks. Most of us know someone who’s had cancer or a heart attack, but few personally know someone who’s been rendered permanently disabled, says Nel.

The most commonly covered conditions are heart attacks, cancer, strokes, and coronary artery bypass grafts, accounting for more than half of all claims, according to ASISA’s Standard on Disclosures for Critical Illness Products. The Standard, introduced in 2009, aims to improve transparency and help consumers compare policies. But awareness remains low, and affordability is a barrier.

We don’t plan for illness the way we plan for death. We assume we’ll be fine until we’re not. Critical illness cover isn’t just for the wealthy. It’s for anyone who wants to protect their future, their family, and their dignity in the face of a health crisis. I’ve learned that the hard way, not through personal illness, but by watching others struggle. And I’ve since made sure I’m covered.

* Maleke is the editor of Personal Finance.

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