Matters with Raziah Ahmed
is said that money is the root of all evil. But
that is difficult to accept in todays world, since we
live in a society in which we have to purchase almost everything
we need in order to provision the household, to
borrow from Aristotle.
In fact, more often than not, the need for money ranks right
up there with our need for oxygen. How we use the money to
satisfy our needs is the crux of the matter.
Last week, we began to look at the outflow of cash from our
pay slips to pay for group life and health insurance. These
are insurance plans that form part of the employees
benefits in the entire compensation package.
We had also made the point that people change at least a few
jobs in their lifetime, and that when one leaves a job, one
leaves the employees benefits package behind, and thus
will be seeking to start anew some other programme of group
life and health plans.
Many people make the mistake of counting group insurance as
their own, but group insurance is one-year, TERM insurance,
that is only good for the time that you are employed with
the organisation which provides the coverage.
We live in an environment where lifetime employment is out
the door, and contract work appears to be the order of the
This makes it even more crucial to invest some premium dollars
in plans that belong to you, as opposed to plans that belong
to the group employer.
Insurance providers will soon have to develop innovative group
life and health products that are suited to groups of professionals
who work on contract, since contract work, commonly, will
not include employee benefits such as group life and health
As yet, individual comprehensive health plans are up-market
and expensive purchases. But major illness coverage is affordable.
The immense irony is that most young people scorn the individual
purchase of major medical insurance cover, but the middle
age, most at risk persons rush for this type of
The older you are, the more prohibitive the pricing, because
the risk gets greater, the older you grow.
The ideal time to purchase individual major medical insurance
is in your 20s and early 30s, when you get your first job.
The premiums are small, and those small premiums will continue
to be small throughout life, up until age 70, when the average
major medical cover expires.
Your cash outflow then, for medical coverage, should include
some protection that belongs to you as an individual, so that
it travels with you wherever you may go in the global workspace
which we now inhabit.
Individual health coverage is permanent insurance; group health
cover is term coverage. It would be prudent to invest some
percentage of your earnings in your health.
Years ago, I met Dr Marius Barnard, who had worked with his
brother, Dr Christian Barnard, on the first heart transplant
team in South Africa in the 1960s.
Dr Barnard made some profound remarks. He said: Modern
medicine will keep us alive...as doctors, we can replace your
kidney, but we will completely remove your savings.
The onus, therefore, is for us to prepare for the contingency
of major organ transplant, cancer, Alzheimers, blindness
or stroke, in such a way that we have our stream of income
that will not be disrupted, when according to statistics,
80 per cent of us will incur major medical bills.
Raziah Ahmed is a registered financial consultant.