SHOULD I CANCEL MY MEDICAL PLAN?

I never seem to need the full benefits of my medical plan.

Should I cancel my policy and put the contributions into shortterm savings, which can act as an emergency medical fund?

Name withheld

John Cranke, a financial adviser at PSG Wealth Employee Benefits in the Midlands, responds: At face value, it might seem like a good idea, particularly if you are dissatisfied with the level of your day-to-day, or out-of-hospital, benefits. But once you realise the extent of the cover that all medical schemes are required to provide by law, the answer is a resounding “no”.

All options on all medical schemes are obliged to cover all beneficiaries in respect of the prescribed minimum benefits (PMBs), which include about 270 in-hospital procedures or treatments and 26 chronic illnesses.

The cover for day-today treatment and planned procedures that fall outside of the management of a PMB condition differs from option to option, with various levels of cover available depending on your needs and what you can afford. If you are faced with a medical emergency and you do not have medical cover, you will either have to use state facilities, which can involve a long wait before you are seen, or you will have to pay upfront.

Medical costs are high, and although you might try diverting your medical scheme contributions into savings, even after an extended period, many treatments – including those for which you can plan, such as childbirth – are unlikely to be affordable from savings alone.

The key is to understand your needs and to match your medical cover with your budget by choosing an appropriate, affordable scheme. A financial adviser can help you with this process.