When we finally get a real job and earn a salary that covers more than just our music and designer habits, we have to start thinking about things that are way less interesting but important none the less. While words like investing, medical aids and insurance may cause our eyes to glaze over, we have to include them on our financial “A” lists. Sometimes we have no choice, they may well appear as evil compulsory deductions on our payslips. I am not going to try and convince you that financial products are sexy, because they are not, in fact Borat in his Mankini is sexier. Insurance and investment products AKA stealers of disposable income, represent less money in our bank accounts and this is never good. But, and there is always a “but”- when a calamity occurs or you want to kick back a little down the road, you will be doing a happy dance without the assistance of anything other than your endorphin’s rewarding you for being smart about insurance.
While all products in your financial arsenal are important, the focus of this article is Medical Aids. So grab some tea or Tequila and have a quick read.
So who needs a Medial Aid?
The short answer to this is everyone but when you are young, fit and healthy, a full medical aid is as far from your mind as the prospect of grey hair and elasticated waist bands. It is understandable that many people balk at paying out good cash to qualify for a free bottle of cough mixture and pimple cream but a medical aid is not just about covering the odd sniffle and scab.
The day may come that something really big goes wrong like a car accident or a slipped disc in your back. These mishaps can cost thousands to fix and can wipe out even the most carefully crafted financial plan. So you need a medical aid. In case you have been lucky and never had to endure a medical procedure here is what a trip to the ER costs nowadays. A basic run-of- the -mill broken arm can cost R10,000, a relatively serious leg break can cost R50,0000.
The really big stuff like a serious car accident can cost 100,s of thousands. This is not a bill you would want to tackle now or at any stage of your life.
Why delay tactics don’t work
You may be willing to roll the dice on the fact that you are healthy and only other people get injured-and hold off on the payments. This could potentially save you squillions of rands until the age of thirty something. After all if you never claim the Medical Aid companies are collecting money for jam. Here, comes another “but” If you apply after the age of 35 you will be charged what the industry refers to as a “Late Joiner Fee”. This translates to a loading on your monthly premium each month, to make up for the fact that you have not contributed to the pool. Medical Schemes need young, fit and healthy non-claimers to fund old, unhealthy and unfit claimers. Now this may sound unfair but one day, (unless you have discovered an elixir that will give you eternal youth) you will fall into the latter group.
The obvious risk you take is having a serious illness or accident. Your only alternative option for medical care if you do not have funds is one of those hospitals that they film horror movies in. You really don’t want to be there. So get a medical aid, it’s the right thing to do.