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Medical Aid Schemes vs Health Insurance

What is the difference, and which one is right for me?

The choice between a medical aid scheme or a health insurance policy depends on your lifestyle, your needs, and your budget. The costs between the two differ because the products offer different services and benefits. This resource will provide you with information on both options so that you can make an informed decision on both.

It is important to note that medical aid schemes are governed by the Medical Schemes Act (No. 131 of 1998), while), and from a prudential and a licensing perspective under the Insurance Act (No. 18 of 2017). Short-term insurance is now referred to as non-life insurance, whilst long-term insurance is now known as life insurance.


Medical Aid Scheme Cover

  • In exchange for a monthly contribution or a premium, you get financial cover for medical treatment you may need, as well as any related medical expenses.
  • There are two kinds of medical schemes, namely, open and closed (restricted) schemes. Any person can join an open scheme, but closed schemes are for the employees of specific employer groups or membership of a particular profession, industry, association or union.
  • Medical schemes, therefore, help you to pay for your healthcare needs, such as medical expenses related to doctor’s visits, nursing, surgery, dental work, optometry, medicine and hospital accommodation when needed.

Health Insurance

  • Is a type of insurance coverage that pays for medical, surgical, and sometimes dental expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly.
  • The benefit could either be a fixed sum of money per day, or a maximum lump sum of money which is paid if a specified health event takes place (e.g. a specific health condition develops).
  • Health insurance policies usually only pay out if certain specific health-related events happen and do not pay your medical expenses as a medical aid scheme would.


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