Cancer Expense Coverage

Cancer Expense Coverage
Are you at risk of developing cancer? The American Cancer Society says that women have a 1 in 3 lifetime risk of developing some form of cancer; men have a 1 in 2 risk.  A family history of cancer or a smoking habit can increase those risks. Is your basic health insurance coverage enough?

Cancer expense insurance is a relatively new type of coverage offered by some insurance companies – it’s designed to give you supplemental coverage, typically in the form of cash payments direct to you, in the event you’re diagnosed with certain types of cancers.  Is it worth the additional cost? Let’s take a look.

Your basic medical insurance coverage may not be enough, if you’re stricken with a catastrophic illness such as cancer.  Most medical insurance plans have deductibles and co-payments, for everything from prescription drugs to hospital and doctor’s fees, to lab tests and nursing care.  As the costs of treatment for illnesses such as cancer continue to skyrocket, health insurance carriers are forcing insureds to pay more of the costs out of their own pocket.  Your plan may have an out-of-pocket expense maximum, but if it has no upper limit, you could be under-insured. 

For example, say you have a PPO plan with a $1,000.00 deductible and a 20% out-of pocket co-payment.  If you’re diagnosed with leukemia, and put on chemotherapy, you’re total cost of treatment may be in excess of $100,000.00  If your insurance company pays only 80%, your out-of-pocket cost could be more than $20,000.00.  Do you have the resources to pay for that yourself?

If not, cancer expense insurance is something to consider.  Typically these types of policies provide for a cash payment benefit that is paid directly to you upon diagnosis of various types of cancers.  It is important to note that skin cancer is typically either excluded from this type of coverage, or is limited in terms of benefits available.

Although coverage varies from company to company, a typical benefit will pay the insured a lump-sum payment beginning the first day of confirmed diagnosis of cancer.  Some policies will pay a smaller amount, such as a $1,000 – 2,000 initially, then a flat fee per day thereafter, such as $100 per day for each day you’re hospitalized, or receiving outpatient or hospice care.  Other insurance companies pay a flat sum directly to you, based on the amount of coverage you chose when you took the policy out: for example, you may have picked a benefit level of $25,000. That amount is paid directly to you upon diagnosis.

The concept behind cancer insurance is to provide you with additional cash at a time when you might need it the most: in the initial stages of your treatment.  You can use these benefits in any way you choose: to help pay living expenses, medical bills, transportation costs to your treatments, whatever you feel is appropriate or needed.  Rather than worrying about where the money is going to come from for all this additional health care, the benefits allow you to concentrate on getting well.

The costs for this type of coverage typically run from about $300 to $700 per year, depending upon options and level of coverage you choose.  Exclusions are what you might expect: you can’t have been diagnosed with, or medically treated for, cancer within five years of the effective date of coverage (with some insurers it’s ten years); there are age restrictions that vary from company to company (age 75 is a typically cut-off date for eligibility), and some companies limit benefits if you’re on Medicare

When trying to decide if cancer coverage insurance is right for you, you’ll need to carefully evaluate your existing medical coverage, what assets you have that could be put at risk if you’re diagnosed with cancer, such as retirement benefits or savings, your age and general health, and how likely you feel are the chances you might develop cancer, based on your family history and personal habits. Make an informed choice.

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