Should Everyone Own a Cancer Plan

Should Everyone Own a Cancer Plan?

Cancer is a scary disease that impacts many lives. Treatments can be expensive and insurance doesn’t always cover everything. That’s why some people buy supplemental cancer insurance plans. But should everyone have one of these plans?

What is a Cancer Insurance Plan?

A cancer plan is a type of supplemental insurance policy. It pays out cash benefits if you are diagnosed with cancer. The money can be used however you want. It’s meant to help with costs not covered by regular health insurance.

These policies provide a lump-sum payment upon initial cancer diagnosis. Many also pay scheduled benefits for treatments like radiation, chemotherapy, surgery, and hospitalization.

Benefits vary, but cancer plans typically pay from $10,000 to $50,000 upon first diagnosis. Treatment benefit amounts range from $1,000 to $10,000 or more per procedure or service.

Cancer Plans are Not Health Insurance

It’s important to understand that cancer insurance is supplemental coverage. It does not replace major medical health insurance. Instead, it works alongside your regular health plan.

The cash benefits from a cancer policy can be used for:

  • Deductibles, copays, and coinsurance costs
  • Household bills and living expenses
  • Mortgage payments or rent
  • Experimental treatments or specialty care
  • Travel and lodging for treatments

Cancer Plans Provide Extra Financial Support

Having a supplemental cancer insurance policy gives you an added layer of protection. The cash benefits help cover unexpected costs associated with cancer treatment. This provides peace of mind during an already difficult situation.

Advantages of Having a Cancer Plan

There are several advantages to adding a cancer insurance policy to your health coverage:

  1. Covers Out-of-Pocket Costs The cash benefits help pay deductibles, coinsurance, copays, and non-covered costs that add up quickly.
  2. Offsets Loss of Income You can use the money to replace lost wages if you or your spouse has to take unpaid leave.
  3. Pays for Added Expenses Cash benefits pay for things like travel, lodging, meals, childcare, and more during cancer treatment.
  4. Benefits Often Paid Directly Many plans pay scheduled benefit amounts directly to you without having to file claims.
  5. Premiums are Affordable Monthly costs for cancer insurance are typically $20-$50 or less depending on coverage levels.
  6. Provides Peace of Mind Knowing you have extra financial protection in place relieves mental and emotional stress.
  7. Supplements High-Deductible Plans The added coverage is useful if you opted for a lower-premium, high-deductible health plan.

Potential Downsides of Cancer Insurance Plans

While supplemental cancer policies offer some clear benefits, they also have potential drawbacks:

  1. Limited Coverage These plans only provide coverage if you are specifically diagnosed with cancer. Different illnesses are excluded.
  2. Benefits Have Caps There are maximum benefit limits that the policy will pay out, often $20,000 to $50,000.
  3. Rate Increases Possible
    Insurance companies can raise premiums over time as long as they increase rates for an entire group.
  4. Payments May Be Taxed Cancer plan benefits may or may not be taxable income depending on certain factors.
  5. Underwriting Requirements Some policies require medical underwriting to qualify, especially if purchased later in life.
  6. Coordination with Other Coverage You must be careful how cancer plan benefits coordinate with other policies to avoid issues.

Who Should Consider a Cancer Plan?

While not necessary for everyone, supplemental cancer insurance may be a smart option if:

  • You have a family history or high risk factors for cancer
  • Your regular health plan has high out-of-pocket costs
  • You want to protect your savings and prepare for worst-case scenarios
  • Cancer treatment in your area is very expensive
  • Your employer offers a group cancer plan as a benefit option

Many people add a cancer insurance policy as an affordable way to shore up their health coverage and financial safety net.

Average Cost of Cancer Plans

Premiums for cancer insurance policies vary based on the coverage levels but are generally affordable:

$10,000 Policy Benefit

  • Cost is around $10-$20 per month

$20,000 Policy Benefit

  • Cost is around $15-$30 per month

$30,000 Policy Benefit

  • Cost is around $20-$40 per month

The earlier you purchase a policy, the lower the rates tend to be. Employers may offer even lower group rates if available.

Cancer Plan Underwriting and Qualification

In many cases, being approved for a supplemental cancer insurance policy requires some medical underwriting. However, acceptance is often guaranteed or simplified if:

  • You purchase through your employer within a set time
  • You enroll within a certain time after other qualifying life events
  • You meet general eligibility criteria for cancer-free status

Those with current cancer diagnoses or other major health issues may not qualify for newly issued cancer plans. Underwriting becomes more stringent if applying at higher ages as well.

Alternatives to Cancer Insurance Plans

If a dedicated cancer insurance plan doesn’t make sense for you, alternatives include:

Critical Illness Insurance These policies pay lump-sum benefits for several major illnesses including cancer, heart attack, and stroke.

Hospital Indemnity Insurance Pays a set cash amount for each day you are hospitalized, which can help cover costs for cancer care.

Accident Insurance Provides benefits if you are diagnosed with cancer caused by an accident or injury.

You could also increase coverages like disability insurance. Or, max out contributions to tax-advantaged healthcare accounts like FSAs or HSAs.

Should You Buy Cancer Insurance?

So should you purchase a cancer insurance policy to supplement your regular health plan? There is no one-size-fits-all answer.

For many, the affordable premiums make cancer plans worth adding for the extra financial protection. The cash benefits provide welcome relief if dealing with cancer costs down the road.

But for others, the limited coverages and benefit caps don’t justify the extra insurance expense.

Consider your current health status, insurance coverages, finances, and cancer risk factors. A supplemental cancer plan can make sense if you highly value the peace of mind and want an added layer of protection.

Just be sure to understand exactly how any cancer insurance policy works before enrolling. Read the fine print. Work with an insurance expert to maximize coverage and avoid overlaps or potential tax issues.

With the right policy in place, you’ll be better prepared financially if you or a loved one is ever diagnosed with cancer and requires extensive treatment.

Have any questions? Call us at 980-272-8203‬