New pandemic hospital cash plan launched

Cover for extra costs when ill

A new hospital cash plan is designed to meet expenses you may incur when you are in hospital with coronavirus. Picture: 123RF/ALEKSEY
A new hospital cash plan is designed to meet expenses you may incur when you are in hospital with coronavirus. Picture: 123RF/ALEKSEY

Sirago has launched a new insurance policy that will pay you out if you are hospitalised for Covid-19.

The policy, Pandemic Shield, has a three-week waiting period after which it will pay you out if you are hospitalised for more than 48 hours after testing positive for the virus. 

The policy also offers cover for hospitalisation as a result of any future disease that the World Health Organisation declares a pandemic as it has declared the coronavirus.

The policy has two levels of cover – for R99 a month you can get a benefit of R25,000 if you are hospitalised, but the more expensive option for R199 a month offers you a lump sum of R50,000 if you are hospitalised and R500 a day for each day you are in hospital up to 14 days. 

Martin Rimmer, the CEO of Sirago, says the policy is designed to cover any kind of expense you might incur if you are hospitalised and is suitable for both medical scheme and non-medical scheme members.

Medical scheme members enjoy private hospital cover if they are diagnosed with Covid-19 and all costs should be covered in full as the illness is a prescribed minimum benefit that schemes are obliged to cover.  

If you do not have medical scheme cover, you should know that it has been reported that private hospital costs for coronavirus can exceed R11,000 a day if you are admitted to ICU, so even a R50,000 payout may not cover your medical costs in full.

Most people who get the virus will not be hospitalised, however. Many who fall ill recover without being hospitalised and many may only be quarantined for coming into contact with those who are ill. 

Medical scheme Bonitas recently reported that among those who are infected with Covid-19, only 20% will be hospitalised and of those only 5% will be treated in ICU.   

Among the 80% who get the virus but do need to go to hospital, 20% will be asymptomatic and 60% will need treatment at home.

Rimmer says Pandemic Shield will not cover you if you need treatment or to be quarantined at home – the cover is only for those who are admitted to hospital for more than 72 hours after testing positive for the virus. 

If you are unlucky enough to be admitted to hospital the Pandemic Shield policy benefit can be used for any expenses you incur – for example, child care, but Rimmer says it was not designed to replace your income should you be hospitalised.

The policies can be bought from brokers or from the insurer, Genric, directly online and cover can be granted immediately. 

There is a 21-day waiting period that also applies after each claim but there is no other underwriting nor exclusions. You cannot take it out if you are over the age of 60.

If you already have a hospital cash plan, you may wonder why you need Pandemic Shield. 

Rimmer says short-term insurance products generally have standard exclusions that could mean hospital cash plans would not pay out for pandemics.

However, Clientele Life, Metropolitan and Hollard told Money they will not exclude claims for admissions to hospital from the coronavirus from cover as long as you have a valid claim and the waiting period has passed.  

Hollard is no longer selling hospital cash plans. 

Ayanda Mazwi, senior assistant ombudsman at the Ombudsman for Short-Term Insurance, says no complaints have been registered with it regarding rejected claims for hospitalisation as a result of Covid-19. 

Kedibone Dikokwe, divisional executive for conduct of business supervision at the Financial Sector Conduct Authority, says it is also not aware of any insurers denying hospital plan claims. 

She says if insurers make changes to their insurance policies they would need to comply with the applicable insurance legislation, the terms of the policy on changes and the Treating Customers Fairly Principles.