What Is Gap Cover and Why Do I Need It?


A sound financial plan is meant to leave you and your loved ones independent in the event of life changing circumstances. When thinking about financial planning or discussing it with your financial planner, the major concerns that usually cross one’s mind are those that will leave a capital dent in your estate after death, and the shortfalls in capital and income at retirement.

One aspect of financial planning that is often overlooked concerns current threats and costs that could pop up unexpectedly and drain the money from your wallet. This article aims to focus on one cost-effective way to avoid a potential crippling of your finances.

Gap-Cover

Let’s examine this often overlooked product, and in doing so show you how you could save a vast amount of money and sleep easier at night.

Firstly, gap cover is primarily designed to serve as shortfall insurance on your medical aid. This means that should you need to claim against the hospitalization portion of your medical aid and the claim exceeds the amount that your medical aid will cover, gap cover funds the difference (subject to certain limits). This is particularly useful in the South African medical environment where medical professionals and specialists usually charge in excess of what your medical aid will cover.

In recent times, gap cover providers have started offering additional benefits to their products, including additional explorative procedures. This includes PET, MRI and CT scans, as well as additional cancer treatment benefits. The costing of this product ranges between R70 and upwards monthly, depending on the product and company. For a comprehensive plan, one could expect to spend R255 monthly for an entire family- a small price to pay for bills that could escalate to obscene amounts.

Additional benefits are that the members of a gap cover policy do not have to be with the same medical aid. All recognized medical aids have the option of attaching gap cover to private and corporate schemes alike. Once purchased, the gap cover rides on the back of your medical aid benefits, so should your medical aid not cover something, neither will the gap cover. This is an important point to keep in mind when considering this product.

The benefits of gap cover are crucial to your financial plan, and in a world where good financial planning comes at a premium, something this cost-effective and beneficial should not be overlooked or discarded.

For more information on gap cover and similar products that can benefit you and your family, contact a 1.618 financial advisor who will happily assist you.

Click here to find out more about how 1.618 Financial Services can help you with your Medical Aid and Gap Cover.

This information is not “advice” as defined and contemplated in the Financial Advisory and Intermediary Services act, 37 of 2002, as amended. It is important to speak to a Financial Adviser about Gap Cover.

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