Is Cancer Insurance Worth It? Here’s How To Decide

Cancer is a formidable adversary that affects millions of lives globally, both emotionally and financially. In the face of this daunting challenge, having a comprehensive insurance plan tailored for cancer becomes not just a choice but a necessity. This article delves into the purpose, costs, and coverage aspects of cancer insurance, aiming to empower individuals with the knowledge needed to make informed decisions in times of adversity.

Is Cancer Insurance Worth It

Purpose of Cancer Insurance:

Cancer insurance serves a critical purpose by addressing the financial challenges that often accompany a cancer diagnosis. Unlike general health insurance policies, which may not cover all the specialized costs associated with cancer treatment, cancer insurance is designed to provide targeted financial support.

One primary feature of cancer insurance is the provision of a lump sum payment or regular payouts upon the diagnosis of cancer. This financial assistance is invaluable, as it allows policyholders to use the funds as needed, whether for medical treatments, supplementary therapies, or non-medical expenses like household bills and daily living costs. This flexibility empowers individuals to make decisions based on their unique circumstances and priorities during a challenging time.

The purpose of cancer insurance becomes especially evident when considering the various expenses associated with cancer care. Cancer treatments often involve surgeries, chemotherapy, radiation therapy, and other specialized procedures. These procedures come with their own set of costs, including hospitalization, specialist fees, outpatient services, and more. Cancer insurance helps offset these expenses, ensuring that individuals can focus on their recovery without the added stress of financial strain.

Furthermore, cancer insurance provides a layer of financial protection beyond what traditional health insurance may offer. It takes into account the indirect costs of cancer, such as transportation to medical appointments, lodging for out-of-town treatments, and other miscellaneous expenses that can accumulate during the course of treatment.

Cost of Cancer Treatment vs. Cost of Cancer Insurance

One quotation indicated that a 40-year-old could secure a policy with a maximum benefit of $20,000 for a monthly premium of $20.

Suppose an individual, aged 60, developed cancer. By then, they would have paid $4,800 in premiums over 20 years, potentially receiving a $20,000 benefit in return. This particular scenario would have validated the wisdom of purchasing the policy.

Another aspect to consider is that certain policies diminish the maximum benefit once a specific age is reached. For instance, some policies reduce benefits by half at the age of 70, while others do so as early as age 65.

Now, envision a situation where you paid the $20 premium for 25 years on a $20,000 cancer policy, and upon turning 65, the policy halves your benefits. In this case, you would have paid $6,000 over those 25 years to collect $10,000 in benefits. Although it still yields a positive return, the return is considerably lower.

Data was gotten from MeetBreeze

Cancer insurance has limits to consider

As you evaluate your choices, it’s important to take into account the constraints associated with cancer insurance.

One significant limitation is the maximum benefit amount. For instance, a particular cancer policy might cap benefits at $2,000 per month and $16,000 per year for covered treatments, with an additional one-time limit of up to $10,000 upon receiving a first cancer diagnosis.

Some policies have a total maximum payout as low as $10,000, while others offer more generous benefits, such as a $100,000 maximum — though it’s important to note that higher benefit amounts often come with higher insurance premiums.

Certain cancer policies may withhold benefits for less severe diagnoses, like non-melanoma skin cancer. It’s advisable to check if your policy covers benefits for a cancer recurrence after remission, as well as the duration between diagnoses for which the policy will pay for a second occurrence.

A critical factor to consider is whether the cancer policy allows for double benefits. Some plans specify that you cannot receive dual benefits from both a cancer policy and your primary health insurance. Moreover, your primary health insurance plan may not cover duplicate benefits offered by a cancer insurance plan due to a coordination of benefits clause. This process determines which insurance takes precedence when you have multiple policies.

Coping Without Cancer Insurance:

Coping without cancer insurance can be challenging, but there are alternative strategies and resources available to help manage the financial aspects of cancer care. While having dedicated cancer insurance offers a safety net, individuals without such coverage can explore the following options:

  • Government Assistance Programs:
  • Charitable Organizations and Foundations:
  • Hospital Financial Assistance Programs:
  • Negotiating Medical Bills:
  • Clinical Trials and Research Studies:
  • Community Support:
  • Utilizing Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs):
  • Financial Counseling Services:
  • Open Communication with Healthcare Providers:

Before making a decision to purchase any cancer insurance plan, it is essential to adhere to four key guidelines:

  1. Gain a thorough understanding of the policy by discerning what is covered, what is excluded, and the waiting period before accessing benefits.
  2. Conduct a meticulous comparison between the benefits offered by a supplemental policy and your primary insurance to identify potential overlaps or redundancies. It is redundant to invest in cancer insurance if your current plan already covers most, if not all, of the same expenses.
  3. Evaluate whether the cost of cancer treatment is adequately addressed by your primary insurance. If not, consider upgrading your policy to fill any coverage gaps.
  4. If you determine that cancer insurance is a viable option, invest time in exploring different options. This exploration should extend beyond cancer coverage and encompass other types, such as long-term disability insurance.

Remember, there are numerous tax deductions available for individuals facing cancer. Keep meticulous records of all out-of-pocket expenses, including travel to and from medical appointments, to mitigate annual tax exposure and save money.

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