Is cancer insurance worth it?
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When you or someone in your family is diagnosed with cancer, the impact is physical, emotional, and, all too often, financial. Even with medical insurance, a cancer diagnosis can add significant expenses to your life. But in a time of stress, the last thing you need to think about is money. That's why a growing number of people are signing up for cancer insurance. But is it right for you?
What cancer insurance is, and how it works
First of all, it’s important to understand that cancer insurance is not a substitute for a primary health insurance plan, and it’s typically much less expensive: $20 to $90 per month on average.1
So, what does cancer insurance cover? It's a supplemental health insurance designed to help with costs by making benefit payments directly to you based on a cancer diagnosis and related treatments. More comprehensive plans may also provide continuing payouts for subsequent cancer-related therapies (for example, for each radiation or chemotherapy session).
To make a claim, you typically have to fill out a form and provide proof of diagnosis or treatment from your provider. Shortly after, your benefit payment for covered items is mailed to you or even deposited directly into your bank account. As you recover, since the benefit payments are sent directly to you, they can be used for whatever you like, such as medical insurance co-pays, deductibles, or daily living expenses. It's the kind of added financial support that can help you worry less about finances and focus more of your energy on recovery.
What cancer insurance may cover | How the benefits can be used |
|---|---|
Items covered and benefit amounts vary, but each plan will spell out the specific cancer-related treatments and services covered, as well as the benefit amount paid. Covered items generally include some or all of the following: • Initial diagnosis | Medical expenses can quickly add up, and there can also be significant non-medical costs. Because the monetary benefits cancer insurance provides are sent directly to you, you can use them any way you choose, including to help pay for all kinds of costs: • Medical co-pays and deductibles |
Pros and cons of cancer insurance
Advantages | Disadvantages |
|---|---|
Financial wellness: By using benefit payments to pay bills and other expenses, you can lessen the need to dip into savings, pay bills with credit cards, or take out loans. | Limited scope: Only covers cancer diagnoses and related treatments. |
Benefit payments can be used to help with everyday living expenses: Because benefit payments come directly to you, you can use them for everyday expenses such as travel costs, lodging, childcare, and even groceries. | Cost: Premiums for cancer insurance may not be worth it if you’re at low risk for developing cancer. |
Reassurance: May be comforting to have, especially for those with a high risk or family history of cancer. | Does not cover preexisting conditions: People who have been previously diagnosed – even with a different kind of cancer – may not qualify for coverage. |
Is cancer insurance right for you?
More and more people are surviving cancer, but the unexpected costs can set back family finances. In some cases, they may even keep people from completing their cancer treatment. Is cancer insurance worth it? If you're concerned about rising medical costs and looking for added financial protection, then the relatively low cost — a few dollars a day — may seem like money well spent. If you have a high-deductible health plan, a cancer diagnosis could mean thousands in out-of-pocket costs which cancer insurance benefits could help cover. And if anyone in your family has had cancer — and you're concerned you may be at risk — you may want to consider getting coverage.
How to get coverage, and what it costs
As a workplace benefit: Cancer insurance is often obtained at work as a "voluntary" (employee-paid) benefit to supplement group medical coverage, so ask your employer or HR department if this benefit is available as part of your benefits package. When you enroll in coverage at work you'll typically benefit from a simpler enrollment process, easy payroll deductions and group rates not available to those who purchase coverage on their own.
As an individual: If you do not have access to an employer-sponsored plan, there are insurance companies that offer individual cancer insurance policies. Before purchasing, make sure you understand the complete details of what’s covered and how much the plan will pay for different diagnoses, tests, and treatments. Also, if you already had a diagnosis of cancer in the past, you may not be approved for coverage.
How cancer insurance compares to other kinds of supplemental health insurance
Cancer insurance is one form of supplemental health insurance or coverage that supplements — but doesn't replace — your traditional medical coverage. Other forms of supplemental health insurance can help provide financial support for cancer as well as other medical issues:
Critical illness insurance provides a benefit payout if you experience a serious covered illness, including cancer, stroke, heart attack, Parkinson’s disease, and more. However cancer-specific benefits may be less generous compared to a more focused cancer insurance policy.
Hospital indemnity insurance can help pay benefits as a result of a hospital confinement for any reason, not just cancer. Monetary benefits are paid directly to you based on admission and days hospitalized, and you can use the money you get to help cover related costs. If you also have cancer insurance, you can typically collect benefits from both policies for a cancer-related hospital stay.
Accident insurance provides benefits if you suffer a covered accidental injury like a severe burn or broken bone, or have to visit an emergency room. It may also cover the diagnostic testing needed to determine if a bone is broken — like for an x-ray. The benefit payment goes directly to you, not the hospital or medical provider.
Alternatives to cancer insurance
Critical illness and hospital indemnity insurance (mentioned above) are often considered as an alternative to cancer insurance because they may pay benefits for many—but not all—situations covered by cancer insurance.
There are also other types of coverage you may want to consider. For example, certain life insurance riders, such as an Accelerated Death Benefit Rider, can pay a portion of the death benefit while you are living to help pay medical costs for those diagnosed with a terminal illness to collect a portion of the death benefit while they are still alive. On the other hand, if you’re concerned about losing income due to an extended cancer-related or other illness — and want income protection — you should consider looking into disability insurance, and in particular, long-term disability insurance.
Frequently asked questions about cancer insurance
A cancer insurance plan can be worth it for many individuals, particularly those with a family history of cancer or those who want additional financial protection. It provides monetary benefits that can help you pay for expenses, deductibles, and non-medical costs associated with cancer treatments. The financial help it offers to cancer patients can also be a valuable source of emotional support in a time of stress. However, the decision to get coverage depends on your personal circumstances, including your existing health coverage, financial situation, and risk factors like family health history. It's important to carefully consider your needs and compare the potential benefits with the cost of premiums before deciding if cancer insurance is right for you.
While specific terms vary by plan, cancer insurance policies typically do not cover the following:
Pre-existing conditions: Most policies won't cover cancer if you were diagnosed before purchasing the policy.
Non-cancer-related illnesses or injuries: These policies are specific to cancer and don't cover other health issues, like heart disease or stroke. Those issues are typically covered by critical illness insurance.
Certain types of cancer: Some policies may exclude specific types of cancer, such as non-melanoma skin cancers.
Experimental treatments: Many policies only cover standard, approved treatments. However, you can use benefit dollars received for other items (like your initial diagnosis) to help pay for an experimental treatment.
Pre-cancerous conditions: These are often not covered.
Claims beyond policy limits: There may be caps on how much the policy will pay out.
As with all types of insurance coverage, it’s important to carefully read the policy details to understand exactly what is and isn't covered before purchasing cancer insurance.
There is no generally recommended age, but it's a good idea to consider cancer insurance if you are at higher risk due to family history or lifestyle factors . It’s also important to remember that as you approach midlife, your cancer risk increases. Many people opt to purchase cancer insurance in their 40s or 50s, when cancer risks begin to rise significantly, but premiums are still relatively affordable. But since you never know when you could be hit with a diagnosis, it may be better to err on the lower side of that range, because most cancer insurance policies require you to be cancer-free (or no known diagnoses) at the time of application.