When cancer is not cancer?

My wife was diagnosed with breast cancer on 18 December 2012. She was already covered by a Life Policy and a Dread Disease clause. She had a successful operation and then a full year of radiation and chemotherapy which took a tremendous toll on her health and well-being. We were covered by medical aid for hospital and medicine and my wife is in remission thank God. But when we requested a payout for cancer from her policy we were told that she had only Stage 2 cancer and did not qualify for any payout - zero. My question then is - why bother with Cancer Cover at all when it has to be so bad that you are going to die anyway and may as well be covered by a life cover. If she had been Stage 4 she would probably have died. Why have cancer cover? When is cancer not cancer. This is misrepresentation at a very devious level. We intend to take this to the highest level.