If you are looking for ancillary products to build year-round revenue opportunities, consider adding supplemental cancer insurance to your portfolio. Cancer insurance can benefit your clients by alleviating some of the financial burden that comes with a cancer diagnosis.
Cancer is the second leading cause of death in the U.S. The American Cancer Society estimates there will be over 12 million new cases in 2024 and over 611,000 cancer deaths. Everyone knows someone who has been impacted by a cancer diagnosis.
Receiving a cancer diagnosis can be devastating, both emotionally and financially. Diagnosing and treating cancer often requires a lot of medical care, which can include lab tests, CAT scans and MRIs, radiation treatment, chemotherapy, surgery, medications, and bone marrow or stem cell transplants. Cancer treatment may be expensive. Even individuals with good medical insurance may experience high out-of-pocket costs from deductibles, coinsurances, and copayments. Cancer insurance helps offset costs that primary health insurance does not cover.
How Cancer Insurance Works
Applicants for cancer insurance need to answer some health questions. An insurance carrier will not approve anyone with a current cancer diagnosis or a pre-existing condition that predisposes the applicant to cancer, such as an HIV diagnosis. In most cases, anyone who has been previously diagnosed and treated for cancer in the past is ineligible.
There are several types of policies, with details varying by insurer and plan type. To avoid surprises, it’s important to read the policy carefully to understand what it covers as well as any limitations and exclusions. Policies are generally affordable, but premiums vary based on policy type and coverage amounts. Some policies have optional riders, such as a critical illness rider, which covers additional types of illnesses. However, riders increase the cost of the policy. Unlike other health insurance, the carrier makes payments directly to the policyholder.
- Lump Sum Policy – This is the most common type of policy. It pays a predetermined amount of money to the policyholder if the policyholder receives a cancer diagnosis. There are no restrictions as to how the policyholder may use the money – policyholders may use the funds for medical costs or everyday living expenses.
- Expense Incurred Policy – These policies pay a specific percentage of treatment costs, up to a predefined limit. Some policies have deductibles and copays.
- Scheduled Benefit or Indemnity Policy – These policies pay a predetermined fixed amount for each treatment the policy covers. Some policies have deductibles and copays.
Some of the more common types of policy limitations include:
- Limits on the types of cancers covered – For example, most policies do not cover non-melanoma skin cancer.
- Other conditions related to cancer – Most policies do not cover separate conditions related to the cancer or cancer treatment.
- Time limits – Some policies have waiting periods before coverage becomes effective. Others stop paying benefits after a fixed period of time, usually two or three years.
- Non-medical expenses – Some policies do not cover non-medical expenses, such as travel and lodging for treatment out of town, home care, help with household tasks, etc.
- Coordination of benefits clause – If there is a coordination of benefits clause, make sure to understand how it works. This specifies which insurer pays first. Most insurers will not cover the expenses another insurer is paying for.
Help Your Clients Assess Their Risks
Your clients value your knowledge and expertise. You can help them assess their risks to determine if cancer insurance is right for them by considering the following:
- Do they have a family history of cancer?
- What does their primary medical insurance cover? What out-of-pocket expenses should they expect to incur for medical care and prescription drugs if they receive a cancer diagnosis?
- Will these out-of-pocket costs cause a financial burden for them and their family?
- If they have a Medicare Advantage plan, do they want the option to go out of network for care? Depending on the type of plan they have, they may lack coverage for out-of-network care or they may have coverage with higher out-of-pocket costs.
- Do they want the option to receive experimental treatment? (Most insurance carriers do not cover this.)
- Do they value the added protection and peace of mind that comes with having cancer insurance?
Stay Compliant with CMS Guidelines
CMS guidelines allow you to sell other health-related insurance products during a Medicare meeting. Make sure you document the sale on your Scope of Appointment form.
Do you have questions? The dedicated team at PTT is here to support you. Contact us today.