Why is it important not to purchase insurance based on the lowest premium?
The premiums underwriters charge, are direct proportional to the risk they are prepared to
underwrite and the level of cover they are prepared to give.
For higher premiums one can expect the acceptance of a higher risk and higher levels of cover.
Lower premiums reflect lower risk acceptance and the limitations of the types and
amounts of cover they provide.
Low premium policies e.g. will limit hospitalisation to R1,000 per claim and R2,000 per annum. Prescription medicine e.g. will be limited to per claim R750. These are all wholly inadequate levels of cove. Ask for the schedule of benefits before you sign up for anything.
The simple rule is that the more you pay, the more you get; the less you pay, the less you get.