Welcome to Know Your Money, where we will explore our relationship with money and how the psychology of it impacts our financial decisions, as everyone thinks about money differently. In our podcast, we'll be presenting a variety of financial topics in an easy to understand way, which we hope will assist you with managing your money. Welcome to Know Your Money, everybody. Hello Warren, hello Craig, how are you today?
Speaker 2:I'm good. And you, warren, how are you today? Always a pleasure, never at your guys. That's great.
Speaker 1:Awesome stuff. Okay, so today we wanted to just explain another insurance concept. The reason for this is, like some people just don't know what it is and we just want to give you a broad idea of what it is so that you can chat to someone else or chat to your financial advisor about it. So, gap cover, do you want to explain, or should I?
Speaker 2:I think gap cover is a policy separate to your medical aid and, if I'm right in this one, and if you have an operation and let's say, the doctor or the surgeon and the neath at this charge a lot more than your medical aid pays out, they will pay out the difference. I think their limits. Some of them pay 500% of the cost of the cover And so that helps you cover the shortfall with a neath at this and the surgeon. And I think there are other benefits. There's some cancer benefits, some of them have dental benefits. So I think it depends.
Speaker 1:So dental is actually quite a tough one and most of them most of them don't have for what's the word when you're trying to do like cosmetic dentistry things.
Speaker 2:So there's not that This is only accidental cover.
Speaker 1:Yes, and basically how gap cover is explained is often you'll go and then, well, not often. Some people never really experienced shortfalls, so they don't think that it's worth it. So now that's based on what medical aid plan you're on. So one that I can explain is discovery If you're on a central plan, you only covered for 100% in hospital rates. If you're on a classic plan, you're covered for 200% in hospital rates. So what that pretty much means is they have a set amount that they feel an anaesthetist should charge for an operation or anything.
Speaker 1:So let's say, for example, it's a thousand round, You would be covered 100% for a thousand round if you were on the central plan. But if that anaesthetist doesn't want to charge a thousand round, he wants to charge 3000 round and you're on the classic plan. you'd be covered for 200% of that bill. So 2000 round and a thousand round would be the shortfall which you would have to cover. Now, gap cover covers those things. Another really nice thing that they cover is once a year, most of them. If you are on a network of hospitals and you want to go to a non-network hospital, you pay the co-payment, but you can claim the co-payment back from GapCover. While that's important or not is younger people can go on a network hospital list to pay a cheaper premium and then, even if they needed to go to a non-network hospital, they'd have one chance a year to go to that.
Speaker 2:So, Bron, are you saying that you could potentially have a network medical aid, which is it's cheaper per month to pay? Yes, And you top it up with a GapCover which could make sure that your shortfalls are not so big. and maybe no shortfalls. but you probably need to check the network of hospitals, who is in the network? So your medical aid is important to know what that covers and how that dovetails with your GapCover.
Speaker 1:Absolutely, because you have.
Speaker 2:You can't have GapCover without medical aid.
Speaker 1:Yes, so you have to have medical aid in order to have GapCover. Like, for example, we are on the Delta plan, which means that we can only go to a certain network of hospitals, but that's also because we're relatively healthy. So it's not like we're going to the hospital and you still get all of those additional things. So GapCover is just there because there's been I've had experience with clients where they all of a sudden got this massive doctors bill and they were under the impression that the medical aid covered everything, and then they left to try and pay these bills, and we just don't want that for you. So again, this is about holistically looking at everything and making sure that your affordability is right. So to be on the medical aid plan that you want to be on, because you know that will only be up to 300% hospital rates Now doctors can charge 600% 800%. So sometimes you're better off on a lower medical aid plan and then a high GapCover to pay shortfalls. But there are limits to how much each person can claim from their GapCover in a year.
Speaker 2:GapCover is for only for medical sorry, medical emergencies, or so you have. You need to go and have an operation. You break your leg. Whatever Is it only medical emergencies? they would apply to So cosmetic stuff like that.
Speaker 1:Yes, so GapCover's in hospital, so it has to be hospital things. It's not like a GP and then that wasn't covered or like sometimes. And also it depends on what plan you're on and what your company you're with. So these are important questions to ask your GapCover person. But in general it's not like if you have a shortfall on your meds, you know, just day to day in hospital.
Speaker 2:The big expense is the neathest and the surgeons. That's the biggest expense that could. You could be shortfall on that And it's important to speak to the GapCover person and find out how that cover dovetails with your current medical aid. That will decide on which plan will suit you Because, as Brian said, not you don't have an unlimited claim on the GapCover. There's a limit to the claims and there's limits change every year, but as does your medical aid.
Speaker 1:So just get a bit of an understanding. Yeah, so I think the take-homes from this is just to find out what medical aid plan you're on and how much you sort of covered for in hospital things and potentially look at getting GapCover. Thanks guys.
Speaker 2:Have a great day, warren Bron Cheers.
Speaker 1:Bye.
Speaker 2:Thank you for listening. If you have enjoyed this podcast or like to subscribe, please visit our website wwwgrowthfpcoza. The information we have provided in this podcast is our personal opinion. For more detailed information, please discuss your financial situation with a financial planner.