I
,SR3702 Assignment 2 Semester 2 Memo | Due 15
MULTIPLE CHOICE,ASSURED EXCELLENCE
1. Describe life policies that are covered by National Health
Insurance. (2)
Short answer: None. The NHI is designed to finance personal
health services (preventive, promotive, curative, rehabilitative
and palliative services) through a single national fund — it does
not provide life-insurance products (death benefits, surrender
values, annuities, etc.). The NHI’s benefit package is a
healthcare/service benefits package (to be specified in the
Benefits Framework and regulations), not life-insurance
contracts. health.gov.za+1
2. Describe five policy clauses of life insurance, from the
policies described in 1 above, that do not apply to National
Health Insurance. (10)
Because the NHI does not issue life-insurance policies, common
life-insurance clauses do not apply. Five typical life-insurance
clauses and why they don’t apply to NHI:
1. Sum Assured / Death Benefit clause — life policies
promise a contractual lump-sum payable on death. NHI
provides health service entitlements, not lump-sum death
payouts, so there is no “sum assured” clause. health.gov.za
, 2. Beneficiary designation clause — life policies allow the
policyholder to name beneficiaries who receive proceeds
on death. NHI benefits are service deliveries to patients
and do not permit beneficiary payouts.
3. Cash-value / Surrender value clause — many life or
endowment policies build a surrender/cash value if
cancelled. NHI has no cash-value or surrender mechanics
— services are delivered or purchased, not cashed out.
4. Policy loan / borrowing clause — life policies sometimes
permit loans against built value. NHI contains no
lending/loan feature; it is a purchaser of services.
5. Premium/underwriting and mortality-rated premium
clause — life policies charge premiums or adjust cover
based on underwriting, age, mortality risk or exclusions for
pre-existing conditions. NHI is funded through public
financing mechanisms (taxes/mandatory contributions)
and provides universal entitlements rather than
individualized mortality-rated premiums or underwriting.
discovery.co.zaRCS Group
(Each clause above is standard to life-insurance contracts and is
therefore irrelevant under the NHI model, which is a
social/pooling arrangement for health services rather than a
private insurance contract.)
3. Discuss the disadvantages of National Health Insurance. (10)
, The main disadvantages, with brief explanation for each:
1. Funding and affordability risk — critics warn the NHI
requires large, sustained public financing (tax/contribution
increases) and funding shortfalls could undermine
benefits. Uncertainty about how the Fund will be financed
and sustained is central to the debate. ReutersRCS Group
2. Implementation timeframe and complexity — rolling NHI
out (purchaser arrangements, contracting providers,
national pricing, IT, registries) is technically complex and
will take many years; partial implementation raises
transitional issues. health.gov.zaHST
3. Strain on public health capacity — expanding access
without parallel, rapid strengthening of public facilities,
staff and equipment risks longer queues and service
quality problems in the short term. HST
4. Potential effect on private sector and medical schemes —
once fully implemented, private medical schemes will be
limited in covering services paid by NHI; this raises
uncertainty about how the private sector will adapt and
whether private provider capacity will be sustained.
discovery.co.za
5. Risk to patient choice and perceived quality — opponents
fear reduced choice of providers and downward pressure
on prices may affect provider behaviour and quality of
,SR3702 Assignment 2 Semester 2 Memo | Due 15
MULTIPLE CHOICE,ASSURED EXCELLENCE
1. Describe life policies that are covered by National Health
Insurance. (2)
Short answer: None. The NHI is designed to finance personal
health services (preventive, promotive, curative, rehabilitative
and palliative services) through a single national fund — it does
not provide life-insurance products (death benefits, surrender
values, annuities, etc.). The NHI’s benefit package is a
healthcare/service benefits package (to be specified in the
Benefits Framework and regulations), not life-insurance
contracts. health.gov.za+1
2. Describe five policy clauses of life insurance, from the
policies described in 1 above, that do not apply to National
Health Insurance. (10)
Because the NHI does not issue life-insurance policies, common
life-insurance clauses do not apply. Five typical life-insurance
clauses and why they don’t apply to NHI:
1. Sum Assured / Death Benefit clause — life policies
promise a contractual lump-sum payable on death. NHI
provides health service entitlements, not lump-sum death
payouts, so there is no “sum assured” clause. health.gov.za
, 2. Beneficiary designation clause — life policies allow the
policyholder to name beneficiaries who receive proceeds
on death. NHI benefits are service deliveries to patients
and do not permit beneficiary payouts.
3. Cash-value / Surrender value clause — many life or
endowment policies build a surrender/cash value if
cancelled. NHI has no cash-value or surrender mechanics
— services are delivered or purchased, not cashed out.
4. Policy loan / borrowing clause — life policies sometimes
permit loans against built value. NHI contains no
lending/loan feature; it is a purchaser of services.
5. Premium/underwriting and mortality-rated premium
clause — life policies charge premiums or adjust cover
based on underwriting, age, mortality risk or exclusions for
pre-existing conditions. NHI is funded through public
financing mechanisms (taxes/mandatory contributions)
and provides universal entitlements rather than
individualized mortality-rated premiums or underwriting.
discovery.co.zaRCS Group
(Each clause above is standard to life-insurance contracts and is
therefore irrelevant under the NHI model, which is a
social/pooling arrangement for health services rather than a
private insurance contract.)
3. Discuss the disadvantages of National Health Insurance. (10)
, The main disadvantages, with brief explanation for each:
1. Funding and affordability risk — critics warn the NHI
requires large, sustained public financing (tax/contribution
increases) and funding shortfalls could undermine
benefits. Uncertainty about how the Fund will be financed
and sustained is central to the debate. ReutersRCS Group
2. Implementation timeframe and complexity — rolling NHI
out (purchaser arrangements, contracting providers,
national pricing, IT, registries) is technically complex and
will take many years; partial implementation raises
transitional issues. health.gov.zaHST
3. Strain on public health capacity — expanding access
without parallel, rapid strengthening of public facilities,
staff and equipment risks longer queues and service
quality problems in the short term. HST
4. Potential effect on private sector and medical schemes —
once fully implemented, private medical schemes will be
limited in covering services paid by NHI; this raises
uncertainty about how the private sector will adapt and
whether private provider capacity will be sustained.
discovery.co.za
5. Risk to patient choice and perceived quality — opponents
fear reduced choice of providers and downward pressure
on prices may affect provider behaviour and quality of
