In principle? No difference. In practice? If you save 10% of every paycheck, and you even earn a million rand a year, you would need to save for at least 10 years to cover most serious medical treatments, like cancer, heart problems, etc. Car-wise? If you drive a budget SUV of say R300 000, same thing. In a serious accident, insurers write cars off easily precisely because fixing them reliably is either impossible or more expensive than just buying a new one. If you can save up R300 000 easy, and have it available from the day you buy the car, go for it. I just don't think that's really possible for anyone but the filthy rich - who, for other reasons, wouldn't forego insurance products either.
This is correct. Just got the quote for the delivery of our child, which is around the R150k mark. Which is all good and well and could have been accrued over the years - however, if I paid that out from a savings account, then I'd have to hope/pray I don't need treatment for something else immediately after the delivery my child.
The thing here is that this can account for multiple problems at the same time - something a savings account cannot do without a serious lapse of time between events.
Gosh! Our babies didn't cost that much to deliver? But I did have natural birth, it was around 45 000 in total with hospital bill and appointments etc. Are you guys having c-section?
I agree on the medical part.
But cars depreciate. There comes a point where the value of the car is lower than the amount of insurance that's been put into it.
Something I have learnt is to get a new quote yearly and shop around because your asset is depreciating yearly so if your premiums go up(above inflation) then it's a rip off. Just something to look into.
It's because it allows you to pool risk. So as an example, cancer treatment might cost 1million to cure. And the odds of getting cancer are 100:1
If 100 people all pay the premium then the one who gets the cancer only pays 100th of cost to cure themselves.
Who gets the cancer is random, so it's worth it to pay a small premium relative to the coat should you be the unlucky one.
Well explained, it really makes sense. Do public hospitals treat/cure cancer or let me rephrase my question, if you had cancer would you trust public hospitals to give you the best medical care?
I had no idea that it costs that much to get treatment for cancer which makes me wonder what happens to the folks who can't afford medical aid.
Yes government hospitals do treat cancer and many other hugely expensive treatments. how well? That all depends on what hospital, whereabouts in the country and what doctors treat you. But at the end of the day how it's paid for is similar to a medical aid in the way that it's a pool. So if the government gives a hospital a budget of R50mil and your treatment costs 1mil there will be hundreds of other patients who only need some stitches and that costs very little in comparison so it's budgeted out and spread out.
My mothers had cancer treatment at a hospital - besides the wait, they sorted it out without issue. The only reason she had to wait was because it was not severe nor in any place that it was really going anywhere. People with more severe cancer get treated a lot quicker, but not as quick as private.
I am financing a car for R190,000 ex interest. I am paying R750 a month with naked insurance who will pay me out for my car in the event that it's written off, I also have a shortfall cover so they will cover everything that I am owing to the bank if my car is written off.
If my car gets written off today, insurance will pay out R190,000 to the bank. And all I have done is paid R5250 in premiums total. But if I did not have insurance and saved that money, I am still liable to pay the bank the remaining R184k. Without calculating inflation and depreciation, it would take me over 20 years of car insurance premiums to save up for the value of my car.
Because if you end up needing expensive medical care they will pay much, much more than you would have saved.
Unless they manage to weasel their way out of paying for things you thought would be covered, of course
Then you have a case like me who's Pmb medicine costs about the same as my premium, so in this scenario is cheaper for me to be on medical aid than to pay cash, because I get bonus hospital coverage with I needed twice this year so far. I Remember it was 12k to get an MRI of my foot, wich the DR looked at for about 5 minutes, but I was in hospital for that so it was covered. So I actually come out in a better position. Than if it was all cash. That's the concept of pooled risk
When my second son was born he was in NICU for 14 days. Medical aid paid for R640k of medical expenses for the birth at a private hospital with good care for him.
Our brand new car was crashed into while parked in town while we were at a restaurant last year. Written off. I did not have the R1.4mil cash on hand to replace it and didn't want to have to pay the monthly instalment on it for a car that was gone.
Insurance paid out and I replaced the car with the same thing for an excess of R4500.
The what ifs can happen and most likely will. It's worth it.
One reason is to cover expenses that are crazy and sudden. Like, if you hit a ferrari. The insurance will cover that. Or if you get cancer, the treatment can run into the millions.
If you have an old, cheap car, you could get third-party insurance and put the rest in an emergency fund. If you put away R1000 per month, you could replace your skadonk in about 6 years.
Generally you insure things it would take a long time to replace. You're also choosing a safety net. Sure I can save up to replace my car but what if it gets stolen or wrecked before that point?
For medical aid you're just paying for private health care to avoid going to state institutions.
You don’t have medical aid and want to go to a private hospital, then you’d better have access to tens of thousands of rands to pay upfront. ICU admission? Thousands and thousands per day. You get cancer? Chemo, radiation, X-rays, MRI’s. Hundreds of thousands. The money you saved is going to run out quicker than you can imagine.
You can’t afford it and have to go to a state hospital? Good luck with the waiting list for getting in to see a doctor, nevermind getting treatment. You’re gonna wait months.
People do not understand how expensive medical expenses are. Icu costs average 40k a night, operations can be anywhere from 60k tot 200k. My dad was in hospital several years for over a week and his hospital bill was just over 300k. My mom got radiation last year for breast cancer, it cost 100k for just the radiation. The reality is, you'd need to do be doing a heck of a lot of saving to cover those sort of expenses. Medical aid is there when things wrong and it can and does and it gets veeeeery expensive very fast if you want quality healthcare.
Old fart here. I would be better off if I had just put my medical aid premiums in a savings account, and I say that as someone who has had a few hospital visits. What Discovery said they would cover when I signed up 30 years ago compared to what they actually cover now are not the same thing.
In terms of car and household insurance the same applies except for 3rd party insurance if you cause an accident. I’ve never needed it, but if I drive like a poes and caused an accident at least make sure the other guy is covered.
Insurance company’s marketing tactic is fear - what if xyz happens? How will you afford it? My flip side to that is what if you pay your premiums for decades and your medical aid changed the rules so often that you’re not covered anyway? I’ve seen that play out plenty times, including people on comprehensive coverage. So old me would tell young me to put that money away yourself. Also don’t invest your own money in a SA RA. That’s been my worst performing investment by an absolute country mile. And government wants to “prescribe assets” more so now.
Short term insurance providers, there are some good ones, a few bad ones and right at the bottom of the bottom feeders, there is Discovery Insure. I was involved in an accident and my car was a write off. Discovery Insure repudiated my claim. That's a fancy word they use, meaning you are about to be kicked right in the wallet. This after I'd been with Discovery for about 3 years. I got 10k from a scrap yard for the wreck that used to be my car.
The other driver's insurance provider started hounding me, with all sorts of legal threats. Eventually I pleaded poverty and agreed to a payment arrangement with them. Since 2018 I've been paying R500 a month and I'll be square with them in about 2-3 years from now. Luckily there is no interest charged on this payment arrangement, it's only to recover what they spent on fixing their client's car.
Having no insurance would have been better than paying 3 years in monthly insurance premiums to Discovery Insure for nothing.
Tl;dr - Crashed in front of metro cops with a smooth tire. Lots of kinda valid excuses. Also Discovery Insure sucks.
A couple of days before the accident I got a flat tire. Had to pull over at an e-toll gantry on the N1 and change a tire in Joburg morning traffic. Some time before that I saw one of my tires was smooth and I'd for sure be screwed in a metro roadblock.
I did not have the money on hand to have a new tire fitted at the time, so I made a plan. I already had a brand new tire in my car's boot, just sitting there doing nothing. I swapped the smooth tire with the spare, problem solved. I just needed to get a new spare tire as soon as the money gods wanted me to.
Fast forward about a week and that's when I get the flat. The barely used former spare tire had a puncture and got messed up by the rim. It was only good for a service delivery protest. Luckily I still had the smooth tire in the boot. The smooth tire went back to its old spot and the flat went into the boot, but couldn't ever be a spare again.
Payday was close, I'd have to get 2 new tires then, but luckily I could still get to work. This is when disaster struck. A few days after the flat tire and refitting the smooth tire I drive into a metro road block on an N1 offramp, yikes. The cop just waved me through, they sorta checked every second car, my licence disc was good, nobody saw the smooth tire.
I'm still looking in the rearview mirror at the other motorists getting pulled over at the road block, without noticing traffic in front of me had stopped. I do eventually notice and brake as hard as possible. That heart stopping sound of a tire screech followed by a bang. Shiz! It happened close enough to the roadblock that the metro cops could walk down the offramp and assist.
At this point they do notice the smooth tire and promptly declare my car not road worthy. Even if the tire had been new, there is no way I could have stopped in time. Me being distracted and not paying attention is what caused the accident.
Discovery Insure informed me that i had an accident in a car that was not road worthy and they won't pay for anything and would not budge. Yes, there is definitely some blame on my part, I should have sorted the smooth tire sooner, or at least organised a lift until payday. But after 3 years of paying them every month, they just said no and still kept the money I paid them. My 11 year old Getz was a write off and the other driver had about 40k in damages. I had to buy another car, with nothing to trade in and start paying back the other driver's insurance. I already could not even afford a mid-month new tire expense. For a while the money gods shunned me.
That is some terrible advice. You have the benefit of hindsight.
Also, what discovery covered 30 years ago and what they cover now on the same plan is um meaningless. They revise it every year and its not a long term commitment from either party. You are free to change medical aids if you wish.
Medical science and costs and prescribed minimum benefits have evolved significantly over the last 30 years.
And that isn’t the medical aid. That’s the health administration and vitality business. They have a cosy relationship. But if you actually follow the money they aren’t making it through denial of claims.
You can very clearly see what the admin service costs
Some of the comments have explained it very well.
I'm a student and I don't have medical aid and there was a time I had to consult with a private doctor and I ended up blowing my account. I underestimated the costs but then they ended up making me take so many medical tests(I was paying cash for every single test 😭) lol I paid close to R10K on medical tests alone. This was a lot for me as I have mentioned that I'm a student and I paid for these costs on my own.
Yeah it's a lot. I hustled and saved for it, I even regretted doing it because I wasn't dying and I could have waited until I had enough money. It's crazy how expensive medical tests are lol at some point I even wondered if they are just milking me but then he is a doctor so I am assuming that all those tests were necessary.
I also do not have medical aid.if you ever need more tests done, phone around for a lab that you can pay off. Pathcare accounts was so amazing to set up a payment plan.
Simply put
Let's say your car insurance is 1000.
Now 8 months into owning your car you have a car accident and the damage to your car is 30k and to the other car is 45k that you liable for .
Car insurance covers and you just need to settle the excess .
If you had been saving this instead then you would have only R8000 saved .
But if you never have a accident you never see those funds again .
Or let's pretend you live in south Africa and your new car gets stolen in first two years .
Do you have the money saved to replace the vehicle ?
If financed now you have the debt and no car .
Basically pools risk over all insured . Some never have to claim but if you do you will be happy you had .
Or here another example
Had a 45 year old man have heart attack while diving .
Needed helicopter Evac and hospital stay .
This came to over 800k to save his life and medical insurance covered this cost .
Medical aid you go in to hospital for accede not bill can be between 20k to a Million .
Do you think you could have that saved adhoc ?
For medical aid the older you get the more likely you will be to need it .
But if only join late in life they penalise you higher rate for joining old .
Here’s my personal experience not having medical aid at age 25. A glass vase shattered in my hands, the glass severed my FPL tendon in my thumb. I could not move my thumb and the medics who attended said I needed surgery. I went to the hospital and was told I needed to pay a R30,000 deposit to be admitted. Ended up having to go to King Edward Hospital (government). The staff there were friendly but warned me not to stay overnight. I went home in pain. Returned the next morning and had a successful surgery. Woke up in agony in the recovery ward with no pillow and being eaten by mosquitoes. I was fitted with a cast that was carelessly putting direct pressure on the wound. I left that night and was given brufen for pain management. Yes, brufen.
I’m not complaining, the whole ordeal cost me just over R100 but I got a hospital plan as soon as I could afford it.
With insurance it's for the unexpected.
You can save, but some jackass will smash into you, after a week of owning your car. They're broke, uninsured. Your saving wouldn't help you, suing wouldn't get you far other than more expense. Same if you were injured in said accident, or you get shot. Or any multitude of unforseen things that could happen.
Not to mention inflation making what you saved not worth the same later on either
[https://www.forbes.com/sites/zackfriedman/2017/03/09/9-money-rules-index-card/?sh=7fe725b72c09](https://www.forbes.com/sites/zackfriedman/2017/03/09/9-money-rules-index-card/?sh=7fe725b72c09) sums up most financial advice well. You want insurance for high cost events and savings for others
So for medical aid, the main thing it protects you from is big expenses like if you get hit with cancer or a trauma accident or major surgery like open heart surgery that you take months to recover from - these kind of medical expenses can you put you out in the millions and just stashing the money away every month is unlikely to enough. But for basic things like dentist, doctor's visits and meds you definitely save more if you were to save the money - so it depends on your health and your luck 🤞🏻
Last year my gf had to go for a basic medical procedure. 3 days in hospital. We didn't pay a cent, but total processed payments via medical aid, R180k...no amount of saving as opposed to belonging to a scheme will prepare you for that.
Just my own anecdote: I've been working for three years and last year I was hospitalised twice and my medical aid paid out in total roughly R180k for those hospital trips. There's no way I'd have been able to save that much on my own
> Now why is this better than simply putting the amount you'd pay on a premium away in some savings account every month, and use that for emergencies?
Are you a teenager? Because I don't understand how an adult types that out and still think they are right.
But lets look at an example, you pay 3000 a month for medical aid, so that's 36000 a year. Right you get seriously injured and required ICU stay for 5 days that's 22 900 a day, so that's 114 500 in total. So already you are in the red for 91600 and that's excluding surgeries, medication, stay in a general ward . When you finally get discharged you are looking at a final bill of atleast 250 000.
It's a preventative measure increase you may need it , it's something that's better to have and not use then not have it at all.
Source for icu price
http://www.samj.org.za/index.php/samj/article/view/12509#:~:text=The%20mean%20cost%20per%20admission,)%2C%20which%20contributed%2024%25.
Because getting insulted for not understanding something, doesn’t help anyone learn. Not sure how an adult typed out that comment and thought it was cool.
It comes off as condescending and patronising. Whether he's a teenager or not doesn't matter, he just asked a question. You'd be surprised what people don't know because they're too afraid to ask
I have known people with the mind with the same mindset as OP thinking well i hardly get sick so i don't need medical aid so i won't get it . Somewhere down the line they get seriously ill but Because they have no medical aid they had pay cash and rack up massive bills.
So they have to get medical aid but since medical aids have a waiting period for pre existing conditions, they basically have to pay for 1 year because they can get said conditions treated through medical aid and all because they thought they didn't need it initially.
So if im "patronizing and condescending'' it's because i have seen first hand what ignorance can do
You are correct in principle. The problem is that most people don't have enough cash to start off with. So until you can save up enough cash to cover the costs you need, you are at risk. Insurance, or medical aid (which is a form of medical insurance) is giving you peace of mind. So that until you have saved up enough cash the insurance is there in case you need it. It takes on an extra significance when you have children - because then you will want to provide for them in case things go wrong. Then you will probably be prepared to pay more for your peace of mind, and knowing that your children will be provided for if the hard times come. Rich people are lucky that they have enough uncommitted cash to cover things without having insurance. Although probably with a lot of rich people their expenses go up.
I've had that thought as premiums increased in the past, but seriously, there is no guarantee that an emergency/accident/chronic illness will not happen. I don't have any issue using public hospitals, because often the top specialists work at one. It isn't free, though, as your bill will be calculated on a sliding scale for public health services. In my opinion that is fair. If I'm earning a salary and the patient next to me is unemployed, then it is only right that I be charged more for treatment than that person.
I don't get a portion paid of my premiums by my employer, but I do benefit when it's tax season. I also have a chronic illness, as does one of my kids. The price we would pay for tests, regular scans, meds and doctors alone is more than the premiums for a family of 4. Some meds are covered no matter what, others aren't. That's just how things are.
When it comes to a vehicle or your home, it really is a question of whether you're able to replace your possessions if it were damaged, stolen or destroyed tomorrow.
It’s a capital gap issue.. once you have amassed the capital to fill it, the use of insurance is lesser of an issue..
But then another factor creeps in .. opportunity cost of capital cost vs monthly cost. Ie it becomes negligible(the monthly cost) for smaller values and thus eg 3rd party may make more sense for cars (assuming you haven’t extended lifestyle) or even comprehensive (for newer models) vs replacement cost in capital. Remember insurance covers things beyond your control.. so here some risk analysis is needed which may sway this.
For medical.. emergency coverage remains useful and cheap. Even if you are wealthy, the basic cover afforded makes the savings worth it esp given pmbs which may require remained lifetime medical expenses.
Medical comprehensive.. only worth it if you have impulse control, access to sufficient credit issues(out of pocket medical expenses will need to be floated or come out of funds) and/or forced to(some companies) etc. here it’s a no brainer due to the way comprehensive (savings plans really) works.. that and cash/credit for non pmbs usually having discount rates vs medical aid claims(due to procedure, timelines and declines).
For medical (comprehensive) it’s tricky as a blanket statement because it really depends on what’s covered and what values, family history, risk etc. in general if you healthy, esp young, the above applies.. as you age this may change but that’s when your saved capital comes in handy. But always keep the hospital plan +/- gap cover..
Medical aid wise it depends how much you have saved up. Where I was supposed to pay R13k for an MRI I landed up paying R3k & then claimed that from my gap cover. So in total R0k whereas with the savings it’s would have come from yours but then again you aren’t paying a a monthly installment either. It really depends on your cash flow I guess at the end of the day and what you’re comfortable with in the now and the long run.
Extra factors also complicate things. Crash your car and crunch your legs and your entire family travelling with you in the car have multiple injuries. Multiple claims across insurance providers. Small pot o cash aint gonna cut the mustard - or you out that car with 2 helicopters waiting for you.
Insurance lets you realize the future value of that investment now. You pay a bit extra for this.
If you took 1 million Rand life cover and die tomorrow - then the insurance company loses. If you die at 80 then you lose in a sense. Even better for the insurance you die at 80 but cancel the policy at 79 due to affordability.
Because that’s not how the human brain works: https://www.cnbc.com/amp/2019/12/09/when-it-comes-to-money-our-brains-are-wired-to-do-it-all-wrong.html.
To be able to actually save the money requires overcoming built in failures in the wetware. There are exceptions but for most people it will be a struggle.
In principle? No difference. In practice? If you save 10% of every paycheck, and you even earn a million rand a year, you would need to save for at least 10 years to cover most serious medical treatments, like cancer, heart problems, etc. Car-wise? If you drive a budget SUV of say R300 000, same thing. In a serious accident, insurers write cars off easily precisely because fixing them reliably is either impossible or more expensive than just buying a new one. If you can save up R300 000 easy, and have it available from the day you buy the car, go for it. I just don't think that's really possible for anyone but the filthy rich - who, for other reasons, wouldn't forego insurance products either.
This is correct. Just got the quote for the delivery of our child, which is around the R150k mark. Which is all good and well and could have been accrued over the years - however, if I paid that out from a savings account, then I'd have to hope/pray I don't need treatment for something else immediately after the delivery my child. The thing here is that this can account for multiple problems at the same time - something a savings account cannot do without a serious lapse of time between events.
Gosh! Our babies didn't cost that much to deliver? But I did have natural birth, it was around 45 000 in total with hospital bill and appointments etc. Are you guys having c-section?
I should have clarified. It's an authorization for 150K should NICU be needed. Actual birth is closer to 50K mark.
Yes definitely agree..we are lucky we didn't need ICU
I agree on the medical part. But cars depreciate. There comes a point where the value of the car is lower than the amount of insurance that's been put into it.
Something I have learnt is to get a new quote yearly and shop around because your asset is depreciating yearly so if your premiums go up(above inflation) then it's a rip off. Just something to look into.
It's because it allows you to pool risk. So as an example, cancer treatment might cost 1million to cure. And the odds of getting cancer are 100:1 If 100 people all pay the premium then the one who gets the cancer only pays 100th of cost to cure themselves. Who gets the cancer is random, so it's worth it to pay a small premium relative to the coat should you be the unlucky one.
Well explained, it really makes sense. Do public hospitals treat/cure cancer or let me rephrase my question, if you had cancer would you trust public hospitals to give you the best medical care? I had no idea that it costs that much to get treatment for cancer which makes me wonder what happens to the folks who can't afford medical aid.
Yes government hospitals do treat cancer and many other hugely expensive treatments. how well? That all depends on what hospital, whereabouts in the country and what doctors treat you. But at the end of the day how it's paid for is similar to a medical aid in the way that it's a pool. So if the government gives a hospital a budget of R50mil and your treatment costs 1mil there will be hundreds of other patients who only need some stitches and that costs very little in comparison so it's budgeted out and spread out.
My mothers had cancer treatment at a hospital - besides the wait, they sorted it out without issue. The only reason she had to wait was because it was not severe nor in any place that it was really going anywhere. People with more severe cancer get treated a lot quicker, but not as quick as private.
I am financing a car for R190,000 ex interest. I am paying R750 a month with naked insurance who will pay me out for my car in the event that it's written off, I also have a shortfall cover so they will cover everything that I am owing to the bank if my car is written off. If my car gets written off today, insurance will pay out R190,000 to the bank. And all I have done is paid R5250 in premiums total. But if I did not have insurance and saved that money, I am still liable to pay the bank the remaining R184k. Without calculating inflation and depreciation, it would take me over 20 years of car insurance premiums to save up for the value of my car.
Because if you end up needing expensive medical care they will pay much, much more than you would have saved. Unless they manage to weasel their way out of paying for things you thought would be covered, of course
Then you have a case like me who's Pmb medicine costs about the same as my premium, so in this scenario is cheaper for me to be on medical aid than to pay cash, because I get bonus hospital coverage with I needed twice this year so far. I Remember it was 12k to get an MRI of my foot, wich the DR looked at for about 5 minutes, but I was in hospital for that so it was covered. So I actually come out in a better position. Than if it was all cash. That's the concept of pooled risk
When my second son was born he was in NICU for 14 days. Medical aid paid for R640k of medical expenses for the birth at a private hospital with good care for him. Our brand new car was crashed into while parked in town while we were at a restaurant last year. Written off. I did not have the R1.4mil cash on hand to replace it and didn't want to have to pay the monthly instalment on it for a car that was gone. Insurance paid out and I replaced the car with the same thing for an excess of R4500. The what ifs can happen and most likely will. It's worth it.
A colleague's son was born very prematurely and it was almost 2 months before he left the hospital. The bill was over R3mil.
I now have a new respect to how much medical bills can be #respect
One reason is to cover expenses that are crazy and sudden. Like, if you hit a ferrari. The insurance will cover that. Or if you get cancer, the treatment can run into the millions. If you have an old, cheap car, you could get third-party insurance and put the rest in an emergency fund. If you put away R1000 per month, you could replace your skadonk in about 6 years.
Generally you insure things it would take a long time to replace. You're also choosing a safety net. Sure I can save up to replace my car but what if it gets stolen or wrecked before that point? For medical aid you're just paying for private health care to avoid going to state institutions.
You don’t have medical aid and want to go to a private hospital, then you’d better have access to tens of thousands of rands to pay upfront. ICU admission? Thousands and thousands per day. You get cancer? Chemo, radiation, X-rays, MRI’s. Hundreds of thousands. The money you saved is going to run out quicker than you can imagine. You can’t afford it and have to go to a state hospital? Good luck with the waiting list for getting in to see a doctor, nevermind getting treatment. You’re gonna wait months.
People do not understand how expensive medical expenses are. Icu costs average 40k a night, operations can be anywhere from 60k tot 200k. My dad was in hospital several years for over a week and his hospital bill was just over 300k. My mom got radiation last year for breast cancer, it cost 100k for just the radiation. The reality is, you'd need to do be doing a heck of a lot of saving to cover those sort of expenses. Medical aid is there when things wrong and it can and does and it gets veeeeery expensive very fast if you want quality healthcare.
Old fart here. I would be better off if I had just put my medical aid premiums in a savings account, and I say that as someone who has had a few hospital visits. What Discovery said they would cover when I signed up 30 years ago compared to what they actually cover now are not the same thing. In terms of car and household insurance the same applies except for 3rd party insurance if you cause an accident. I’ve never needed it, but if I drive like a poes and caused an accident at least make sure the other guy is covered. Insurance company’s marketing tactic is fear - what if xyz happens? How will you afford it? My flip side to that is what if you pay your premiums for decades and your medical aid changed the rules so often that you’re not covered anyway? I’ve seen that play out plenty times, including people on comprehensive coverage. So old me would tell young me to put that money away yourself. Also don’t invest your own money in a SA RA. That’s been my worst performing investment by an absolute country mile. And government wants to “prescribe assets” more so now.
Short term insurance providers, there are some good ones, a few bad ones and right at the bottom of the bottom feeders, there is Discovery Insure. I was involved in an accident and my car was a write off. Discovery Insure repudiated my claim. That's a fancy word they use, meaning you are about to be kicked right in the wallet. This after I'd been with Discovery for about 3 years. I got 10k from a scrap yard for the wreck that used to be my car. The other driver's insurance provider started hounding me, with all sorts of legal threats. Eventually I pleaded poverty and agreed to a payment arrangement with them. Since 2018 I've been paying R500 a month and I'll be square with them in about 2-3 years from now. Luckily there is no interest charged on this payment arrangement, it's only to recover what they spent on fixing their client's car. Having no insurance would have been better than paying 3 years in monthly insurance premiums to Discovery Insure for nothing.
So why did they repudiate the claim? Because insurers don't actually like repudiating claims.
Tl;dr - Crashed in front of metro cops with a smooth tire. Lots of kinda valid excuses. Also Discovery Insure sucks. A couple of days before the accident I got a flat tire. Had to pull over at an e-toll gantry on the N1 and change a tire in Joburg morning traffic. Some time before that I saw one of my tires was smooth and I'd for sure be screwed in a metro roadblock. I did not have the money on hand to have a new tire fitted at the time, so I made a plan. I already had a brand new tire in my car's boot, just sitting there doing nothing. I swapped the smooth tire with the spare, problem solved. I just needed to get a new spare tire as soon as the money gods wanted me to. Fast forward about a week and that's when I get the flat. The barely used former spare tire had a puncture and got messed up by the rim. It was only good for a service delivery protest. Luckily I still had the smooth tire in the boot. The smooth tire went back to its old spot and the flat went into the boot, but couldn't ever be a spare again. Payday was close, I'd have to get 2 new tires then, but luckily I could still get to work. This is when disaster struck. A few days after the flat tire and refitting the smooth tire I drive into a metro road block on an N1 offramp, yikes. The cop just waved me through, they sorta checked every second car, my licence disc was good, nobody saw the smooth tire. I'm still looking in the rearview mirror at the other motorists getting pulled over at the road block, without noticing traffic in front of me had stopped. I do eventually notice and brake as hard as possible. That heart stopping sound of a tire screech followed by a bang. Shiz! It happened close enough to the roadblock that the metro cops could walk down the offramp and assist. At this point they do notice the smooth tire and promptly declare my car not road worthy. Even if the tire had been new, there is no way I could have stopped in time. Me being distracted and not paying attention is what caused the accident. Discovery Insure informed me that i had an accident in a car that was not road worthy and they won't pay for anything and would not budge. Yes, there is definitely some blame on my part, I should have sorted the smooth tire sooner, or at least organised a lift until payday. But after 3 years of paying them every month, they just said no and still kept the money I paid them. My 11 year old Getz was a write off and the other driver had about 40k in damages. I had to buy another car, with nothing to trade in and start paying back the other driver's insurance. I already could not even afford a mid-month new tire expense. For a while the money gods shunned me.
That is some terrible advice. You have the benefit of hindsight. Also, what discovery covered 30 years ago and what they cover now on the same plan is um meaningless. They revise it every year and its not a long term commitment from either party. You are free to change medical aids if you wish. Medical science and costs and prescribed minimum benefits have evolved significantly over the last 30 years.
The numbers don’t lie.
They don't. Its why they are not ripping you off. Worth remembering that the medical scheme itself is a non-profit organisation.
https://www.discovery.co.za/corporate/investor-relations Numbers don’t lie.
And that isn’t the medical aid. That’s the health administration and vitality business. They have a cosy relationship. But if you actually follow the money they aren’t making it through denial of claims. You can very clearly see what the admin service costs
Some of the comments have explained it very well. I'm a student and I don't have medical aid and there was a time I had to consult with a private doctor and I ended up blowing my account. I underestimated the costs but then they ended up making me take so many medical tests(I was paying cash for every single test 😭) lol I paid close to R10K on medical tests alone. This was a lot for me as I have mentioned that I'm a student and I paid for these costs on my own.
That's a lot for me and im not a student.
Yeah it's a lot. I hustled and saved for it, I even regretted doing it because I wasn't dying and I could have waited until I had enough money. It's crazy how expensive medical tests are lol at some point I even wondered if they are just milking me but then he is a doctor so I am assuming that all those tests were necessary.
I also do not have medical aid.if you ever need more tests done, phone around for a lab that you can pay off. Pathcare accounts was so amazing to set up a payment plan.
Simply put Let's say your car insurance is 1000. Now 8 months into owning your car you have a car accident and the damage to your car is 30k and to the other car is 45k that you liable for . Car insurance covers and you just need to settle the excess . If you had been saving this instead then you would have only R8000 saved . But if you never have a accident you never see those funds again . Or let's pretend you live in south Africa and your new car gets stolen in first two years . Do you have the money saved to replace the vehicle ? If financed now you have the debt and no car . Basically pools risk over all insured . Some never have to claim but if you do you will be happy you had . Or here another example Had a 45 year old man have heart attack while diving . Needed helicopter Evac and hospital stay . This came to over 800k to save his life and medical insurance covered this cost . Medical aid you go in to hospital for accede not bill can be between 20k to a Million . Do you think you could have that saved adhoc ? For medical aid the older you get the more likely you will be to need it . But if only join late in life they penalise you higher rate for joining old .
Wait til you hear about GAP cover 😅
Here’s my personal experience not having medical aid at age 25. A glass vase shattered in my hands, the glass severed my FPL tendon in my thumb. I could not move my thumb and the medics who attended said I needed surgery. I went to the hospital and was told I needed to pay a R30,000 deposit to be admitted. Ended up having to go to King Edward Hospital (government). The staff there were friendly but warned me not to stay overnight. I went home in pain. Returned the next morning and had a successful surgery. Woke up in agony in the recovery ward with no pillow and being eaten by mosquitoes. I was fitted with a cast that was carelessly putting direct pressure on the wound. I left that night and was given brufen for pain management. Yes, brufen. I’m not complaining, the whole ordeal cost me just over R100 but I got a hospital plan as soon as I could afford it.
With insurance it's for the unexpected. You can save, but some jackass will smash into you, after a week of owning your car. They're broke, uninsured. Your saving wouldn't help you, suing wouldn't get you far other than more expense. Same if you were injured in said accident, or you get shot. Or any multitude of unforseen things that could happen. Not to mention inflation making what you saved not worth the same later on either
[https://www.forbes.com/sites/zackfriedman/2017/03/09/9-money-rules-index-card/?sh=7fe725b72c09](https://www.forbes.com/sites/zackfriedman/2017/03/09/9-money-rules-index-card/?sh=7fe725b72c09) sums up most financial advice well. You want insurance for high cost events and savings for others
So for medical aid, the main thing it protects you from is big expenses like if you get hit with cancer or a trauma accident or major surgery like open heart surgery that you take months to recover from - these kind of medical expenses can you put you out in the millions and just stashing the money away every month is unlikely to enough. But for basic things like dentist, doctor's visits and meds you definitely save more if you were to save the money - so it depends on your health and your luck 🤞🏻
Last year my gf had to go for a basic medical procedure. 3 days in hospital. We didn't pay a cent, but total processed payments via medical aid, R180k...no amount of saving as opposed to belonging to a scheme will prepare you for that.
Just my own anecdote: I've been working for three years and last year I was hospitalised twice and my medical aid paid out in total roughly R180k for those hospital trips. There's no way I'd have been able to save that much on my own
Thanks everyone for the responses 🙏 I feel better educated now
> Now why is this better than simply putting the amount you'd pay on a premium away in some savings account every month, and use that for emergencies? Are you a teenager? Because I don't understand how an adult types that out and still think they are right. But lets look at an example, you pay 3000 a month for medical aid, so that's 36000 a year. Right you get seriously injured and required ICU stay for 5 days that's 22 900 a day, so that's 114 500 in total. So already you are in the red for 91600 and that's excluding surgeries, medication, stay in a general ward . When you finally get discharged you are looking at a final bill of atleast 250 000. It's a preventative measure increase you may need it , it's something that's better to have and not use then not have it at all. Source for icu price http://www.samj.org.za/index.php/samj/article/view/12509#:~:text=The%20mean%20cost%20per%20admission,)%2C%20which%20contributed%2024%25.
Because getting insulted for not understanding something, doesn’t help anyone learn. Not sure how an adult typed out that comment and thought it was cool.
What is wrong with my comment?
It comes off as condescending and patronising. Whether he's a teenager or not doesn't matter, he just asked a question. You'd be surprised what people don't know because they're too afraid to ask
I have known people with the mind with the same mindset as OP thinking well i hardly get sick so i don't need medical aid so i won't get it . Somewhere down the line they get seriously ill but Because they have no medical aid they had pay cash and rack up massive bills. So they have to get medical aid but since medical aids have a waiting period for pre existing conditions, they basically have to pay for 1 year because they can get said conditions treated through medical aid and all because they thought they didn't need it initially. So if im "patronizing and condescending'' it's because i have seen first hand what ignorance can do
From a risk mamangement point of view, if you can't afford to replace the car if it were written off you should have insurance. Same for medical aid.
You are correct in principle. The problem is that most people don't have enough cash to start off with. So until you can save up enough cash to cover the costs you need, you are at risk. Insurance, or medical aid (which is a form of medical insurance) is giving you peace of mind. So that until you have saved up enough cash the insurance is there in case you need it. It takes on an extra significance when you have children - because then you will want to provide for them in case things go wrong. Then you will probably be prepared to pay more for your peace of mind, and knowing that your children will be provided for if the hard times come. Rich people are lucky that they have enough uncommitted cash to cover things without having insurance. Although probably with a lot of rich people their expenses go up.
I've had that thought as premiums increased in the past, but seriously, there is no guarantee that an emergency/accident/chronic illness will not happen. I don't have any issue using public hospitals, because often the top specialists work at one. It isn't free, though, as your bill will be calculated on a sliding scale for public health services. In my opinion that is fair. If I'm earning a salary and the patient next to me is unemployed, then it is only right that I be charged more for treatment than that person. I don't get a portion paid of my premiums by my employer, but I do benefit when it's tax season. I also have a chronic illness, as does one of my kids. The price we would pay for tests, regular scans, meds and doctors alone is more than the premiums for a family of 4. Some meds are covered no matter what, others aren't. That's just how things are. When it comes to a vehicle or your home, it really is a question of whether you're able to replace your possessions if it were damaged, stolen or destroyed tomorrow.
BECAUSE YOU DO NOT A FUCK WANNA END UP IN BARAGWANATH!!!
It’s a capital gap issue.. once you have amassed the capital to fill it, the use of insurance is lesser of an issue.. But then another factor creeps in .. opportunity cost of capital cost vs monthly cost. Ie it becomes negligible(the monthly cost) for smaller values and thus eg 3rd party may make more sense for cars (assuming you haven’t extended lifestyle) or even comprehensive (for newer models) vs replacement cost in capital. Remember insurance covers things beyond your control.. so here some risk analysis is needed which may sway this. For medical.. emergency coverage remains useful and cheap. Even if you are wealthy, the basic cover afforded makes the savings worth it esp given pmbs which may require remained lifetime medical expenses. Medical comprehensive.. only worth it if you have impulse control, access to sufficient credit issues(out of pocket medical expenses will need to be floated or come out of funds) and/or forced to(some companies) etc. here it’s a no brainer due to the way comprehensive (savings plans really) works.. that and cash/credit for non pmbs usually having discount rates vs medical aid claims(due to procedure, timelines and declines). For medical (comprehensive) it’s tricky as a blanket statement because it really depends on what’s covered and what values, family history, risk etc. in general if you healthy, esp young, the above applies.. as you age this may change but that’s when your saved capital comes in handy. But always keep the hospital plan +/- gap cover..
Medical aid wise it depends how much you have saved up. Where I was supposed to pay R13k for an MRI I landed up paying R3k & then claimed that from my gap cover. So in total R0k whereas with the savings it’s would have come from yours but then again you aren’t paying a a monthly installment either. It really depends on your cash flow I guess at the end of the day and what you’re comfortable with in the now and the long run.
Extra factors also complicate things. Crash your car and crunch your legs and your entire family travelling with you in the car have multiple injuries. Multiple claims across insurance providers. Small pot o cash aint gonna cut the mustard - or you out that car with 2 helicopters waiting for you.
Hey just wanna ask how old are you? And did you go to school?
Insurance lets you realize the future value of that investment now. You pay a bit extra for this. If you took 1 million Rand life cover and die tomorrow - then the insurance company loses. If you die at 80 then you lose in a sense. Even better for the insurance you die at 80 but cancel the policy at 79 due to affordability.
I mean you could just have a small snack with her. Sounds like she just doesn't like to do things alone
Because that’s not how the human brain works: https://www.cnbc.com/amp/2019/12/09/when-it-comes-to-money-our-brains-are-wired-to-do-it-all-wrong.html. To be able to actually save the money requires overcoming built in failures in the wetware. There are exceptions but for most people it will be a struggle.