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Medical Scheme vs Medical Insurance

Medical Scheme

Medical Insurance Benefits

Governed by Medical Schemes Act and related legislation Governed by Long-term Insurance Act and related legislation
Eligible medical procedures are paid for on an indemnity basis (related to actual cost) The client is insured for specific events as stated (the cover is not related to the medical costs)
Actual medical expenses are paid directly to member or the service providers, up to limits Insured cover amount is paid directly to client, regardless of medical expenses incurred
All applicants must be accepted, regardless the risk May reject applications on grounds of poor risk
Late-joiner penalties and waiting periods may be applied Full underwriting is applicable
Contributions to scheme either paid in full by the member, or subsidized by employer Contributions / premiums paid in full by the client
Only brokers licensed by the council for Medical Scheme and accredited by the product provider may sell medical scheme products. FAIS also applies Licensing of brokers with the Council for Medical Schemes is not required, but they do need to be correctly licensed in terms of FAIS
Trustees of a medical scheme receive a fee for their trusteeship but cannot own shares in the medical scheme The Board of Directors may have shares in the insurance company and receive a share of profit
Members may only belong to one medical scheme at a time Policy holders may take out a number of insurance policies

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