What would you do if you, your spouse or your child were diagnosed with cancer? Would your current health insurance plan cover all of the potentially astronomical costs for treatment?
Would you or your loved ones be able to afford your portion of those bills? How about the many bills your health plan doesn’t address? Bills like experimental treatments, visits to out-of-network specialists, home health care or even daily living expenses?
Fortunately, health insurance companies now offer a plan specifically designed to alleviate the high costs of cancer treatment and care. It's typically called cancer insurance, though some companies offer it in a bundle of critical illness insurance.
Cancer insurance is intended to be a supplemental insurance product that works in conjunction with your primary health insurance plan.
You’ll learn what that means in this article. You’ll also find answers to the following questions about cancer insurance:
- Do you need to buy cancer insurance?
- Which companies sell cancer insurance?
- What types of cancer insurance policies can I buy?
- How much will I pay for cancer insurance?
- What does cancer insurance cover?
Cancer will affect up to 1 in 2 Americans; are you protected?
Get peace of mind by comparing cancer insurance plans.
Do you need cancer insurance?
An increasing number of insurance companies offer policies for cancer diagnosis and care.
Cancer insurance is becoming more and more common because many basic health insurance plans don’t cover all the costs tied to a cancer diagnosis.
The question is: are the premiums you’ll pay for this type of policy worth the peace of mind it provides? Also, does the coverage justify the cost? And when does it make sense to buy cancer insurance?
"The right time to consider a cancer insurance policy is when you are in good health," said Jesse Slome, director of the American Association for Critical Illness Insurance.
The answers to the questions above depend on your personal situation. Factors like your finances, health and form of cancer all impact whether or not cancer insurance is right for you.
The following pieces of information should help you decide if you need cancer insurance or not.
1. The point of cancer insurance is to reduce the price of cancer treatment.
Cancer insurance isn’t supposed to replace the benefits provided by your primary health insurance. Cancer insurance is supposed to help you pay some of the expenses your basic policy doesn’t cover.
2. Cancer insurance policies can cover a lot of costs.
Depending on the policy you buy, cancer insurance can cover a wide range of both medical and non-medical costs.
These are some of the expenses cancer insurance plans tend to cover:
- Hospital stays (especially lengthy ones).
- Visits to out-of-network specialists.
- Various tests, treatments and procedures.
- Child care.
- Dietary assistance.
- Travel and lodging when treatment is far away from home.
3. That said, most cancer insurance plans won’t cover all of these costs.
Few cancer insurance policies cover every one of the expenses mentioned above. Even the ones that do may still leave “gaps” in your coverage. That means you could be left holding a bill that you have to pay.
Also, some cancer insurance policies don’t cover any of the expenses discussed so far. A few of them, like the one Aflac offers, simply offer a specific lump-sum payment that’s made after you are diagnosed.
Don’t go into this situation assuming all cancer insurance plans offer the same benefits or coverage, because that’s not the case. To understand how different plans work, let QuoteWizard help you find the best cancer insurance plan.
4. You may not be able to get cancer insurance if you’ve been diagnosed with cancer.
Some companies will deny you cancer insurance coverage if you have cancer or had it in the past. "It may not be obtainable if you have already been diagnosed with a cancerous condition. Or you are past the age when insurance companies will issue a new policy," said Slome.
At least one provider won't sell you cancer insurance if you’ve been diagnosed or treated for other health issues, too. That includes Hodgkin’s disease, AIDS, AIDS Related Complex or if you’ve tested positive for HIV.
Read the fine print before you get too excited about a particular cancer insurance plan.
5. Pay close attention if you have a family history of cancer.
Cancer insurance doesn’t make sense for everybody. Are you young, healthy, not risk-averse and without a family history of cancer? You might want to use the money you’d hand over for a cancer insurance policy for something else.
Have a number of your relatives been diagnosed with or treated for various kinds of cancer? In that case, cancer insurance may be more worth your while than it is for people without a family history of the disease.
6. Your basic health insurance plan might be more than enough for you and your family.
If you have an average risk of developing cancer, you may want to rely on your basic health plan rather than cancer insurance.
You could also boost or upgrade your basic health plan instead of buying cancer insurance. This option will provide you with an even wider range of benefits.
7. Critical illness insurance may make more sense than cancer insurance.
Rather than focus entirely on cancer, critical illness insurance provides supplemental coverage for other worrisome illnesses. Heart attack and stroke are the most common examples. Critical illness insurance sometimes covers kidney failure, major organ transplants and ALS, too.
Aflac and other cancer insurance providers typically offer critical illness policies as well. This makes it relatively easy to purchase both types of coverage at the same time, if needed.
Critical illness insurance policies usually pay out a lump sum shortly after you’ve been diagnosed. As is the case with some cancer insurance policies, this payment can be used for medical or non-medical expenses.
Something to keep in mind as you consider this type of insurance: critical illness plans have their fair share of critics. Many say there are better ways to prepare for one or more of these illnesses.
8. If you’re enrolled in Medicare, MedSup could be a better option than cancer insurance.
MedSup is a supplemental insurance policy designed to work with Medicare. You have to be enrolled in Medicare to purchase a MedSup plan. If you're on Medicare, MedSup may be a better option for you than cancer insurance.
The reason: Medicare Part B covers 80% of most types of outpatient treatments. That will cover the lion's share of outpatient service for many types of cancer. MedSup can help you pick up the remaining 20% of the bill.
9. Don’t rely on cancer insurance alone.
Before purchasing a cancer insurance plan, make sure your existing health insurance coverage is good enough. Cancer insurance is designed to supplement your primary health plan. If your primary health plan is poor, you'll probably be better off buying better health insurance than adding cancer insurance.
10. Don’t assume that duplicate coverage will provide you with double the benefits.
Not only is it costly to double up on health insurance coverage, but it can be a waste, too. Especially if cancer insurance covers the same ground as your basic health plan.
Instead, find a cancer insurance policy that fills in the gaps left open by your basic health plan. Carefully compare the benefits associated with your basic health insurance plan to any potential cancer insurance plans. Make sure there isn’t too much overlap between the two in terms of what is covered.
11. Carefully compare benefits and costs before you buy a cancer insurance plan.
Cancer insurance plans cover a wide range of costs and treatments and services. Don’t assume what one cancer insurance plan covers is also covered by other cancer plans.
In fact, some cancer insurance policies only provide you with a single lump-sum payment. Also, some policies have waiting periods that force you to wait weeks and even months before your coverage kicks in. Others stop paying out after a certain period of time.
What companies offer cancer insurance?
Several companies sell cancer insurance policies. Here are the best cancer insurance companies:
- American Fidelity
- Colonial Life
- Mutual of Omaha
- Physicians Mutual
- United Healthcare
Compare rates for cancer insurance plans now
What types of cancer insurance policies are available?
You can choose between several types of cancer insurance policies at the moment.
Here are the worst and best cancer insurance policy types on the market today:
Expense-incurred cancer insurance policies pay for a percentage of covered treatments. They usually come with a maximum dollar limit.
Most expense-incurred plans require you to pay out-of-pocket for cancer care, after which your insurer reimburses you. Some insurance companies deal directly with the healthcare provider.
Indemnity cancer insurance policies are similar to expense-incurred policies, except each treatment has payout limits. Aflac's indemnity plan pays a max of $300 per day for radiation and chemotherapy, and $300 per day for hospital stays.
If you have a lump-sum cash cancer insurance policy, your insurer will pay out a pre-determined cash sum if you’re diagnosed with cancer. How you use those funds is up to you. Cigna's plan, for example, pays out between $5,000 and $100,000.
Be aware that you may need to pay taxes on your lump-sum benefits.
Critical illness insurance
Many companies sell critical illness insurance plans that help mitigate high out-of-pocket costs and cover a variety of serious conditions. Strokes, heart attacks, comas and more all qualify as critical illnesses. Specific insurers have their own criteria, but most consider cancer a critical illness, too, and cover it as such.
Critical illness plans usually favor a lump-sum payout, though some use a staggered payout. Other critical illness plans provide direct payment to health providers. Yet others pay for travel and housing costs if patients need to travel to specialists.
How much does cancer insurance cost?
Many supplemental cancer insurance policies cost between $10 to $50 per month. A Cadillac health plan will cost you a lot more. And again, a lump-sum plan with a $5,000 payout will be drastically cheaper than a plan with a $100,000 payout.
With so many different companies and plan types, it's difficult to guess how much cancer insurance will cost you. Estimates become murkier when taking your personal rate factors into account. Fortunately, there are two steps you can take to get better rates.
First, compare quotes from different health insurance companies. Since each company has its own policy types and pricing metrics, cancer insurance premiums vary greatly. You need to compare different companies to find the ideal plan at your best price. "It really is important to compare policies and to read the policy definitions carefully," according to Slome.
Second, talk to an independent agent. "Since many people never read their insurance policy, we strongly advocate working with an insurance broker who is knowledgeable in the topic. And is appointed with more than one insurance company," Slome said. Basically, an independent agent can help you wade through the jargon and find the cancer insurance policy that best suits you.
Keep in mind, the older you are, the more cancer insurance costs. Why? Cancer rates rise quickly as you age. It gets worse around age 65. Insurers will ask you a few qualifying questions during screening:
- Have you been diagnosed with cancer?
- Have you been diagnosed with AIDS, HIV or ARC?
- Has a doctor advised you to undergo cancer tests?
If you answer yes to any of those questions, you may not qualify for cancer insurance.
What does cancer insurance cover?
While coverage amounts vary, most cancer insurance policies pay for the following:
- Doctor visits.
- Hospital stays.
- Prescription drugs.
- Blood transfusions.
- Ambulance rides.
More expensive cancer insurance plans may pay for additional benefits like outpatient treatment as well. These plans also tend to feature better waiting periods and coverage limits.
Lump-sum cancer insurance plans are more flexible. Most don't restrict how you can spend the resulting funds. You can spend it on mortgage payments, housing, groceries — pretty much anything.
Cancer insurance limitations
There are several exclusions you should be aware of when shopping for or buying cancer insurance.
Inpatient and outpatient treatment
Expense-incurred cancer insurance plans may limit your outpatient treatment options. Many cancer policies only pay for inpatient care.
People with cancer have a higher risk of developing other diseases. Their cancer insurance plans may not cover those other illnesses, however. For example, people with lung cancer have an increased risk of catching pneumonia, but cancer insurance usually doesn't cover it.
Indemnity cancer insurance policies restrict payouts for specific expenditures. A policy might only cover $2,000 in surgery costs or $5,000 in radiation costs, for instance. Your ideal limits will depend on your treatment needs.
You may have to wait 30 days or even several months before your policy covers you, depending on which cancer insurance policy you buy.
Though some cancer policies offer guaranteed renewal, many don't.
How much cancer insurance coverage do you need?
The American Association for Critical Illness Insurance recommends that you buy enough cancer insurance to cover two years of mortgage payments. That said, your ideal coverage level depends on your illness, your financial security, your current insurance plan and your preferences.
For example, younger people pay a lot less than older people for cancer insurance coverage. This is because cancer rates are much lower when you're younger. If you have an excellent healthcare plan, you won't need as much cancer insurance coverage. Conversely, if you have a cheap plan with limited benefits, you might need a more extensive cancer insurance plan.
If you're buying a lump-sum cancer plan, it should pay for more than just some of your medical care. The payout should also cover your daily expenses.
Ultimately, you should consult with an independent insurance agent about how much cancer insurance you need. Since they're independent, they won't try to sell you on one specific plan. We can connect you with a health insurance agent to simplify your search.
Other frequently asked questions about cancer insurance
Can I buy cancer insurance after being diagnosed with cancer?
When applying for cancer insurance, an insurer will ask you a few questions. One of those questions is whether you currently have or have ever had cancer. If your answer is yes, you probably won’t be able to buy a policy.
Can I buy cancer insurance if I already have health insurance?
Yes. Cancer insurance is designed to work with your regular health insurance plan. It is not a replacement for your primary health coverage.
Do I need a medical exam to buy cancer insurance?
Most other forms of health insurance require a physical exam. But for cancer insurance, you only need to answer a handful of questions about your health and history.
Is cancer insurance worth the cost?
Whether cancer insurance is worth the cost and right for you depends entirely on your personal details. Does your family rely on your income? Do you have adequate savings to deal with medical problems down the road?
What if you buy cancer insurance and never get cancer? Or what if you have been paying for cancer insurance for years, only to get ALS?
You can't predict the future. Cancer insurance may protect you from the unexpected, but it's no guarantee. It might be a great buy for some people; for others, not so much. But it's relatively affordable, and you're paying for peace of mind.
If you're still curious whether cancer insurance is right for you, speak with an agent. They can help you assess your risks and explore plan options.
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