Tuesday, May 23, 2006

Cancer Plans

For most of my career I have considered the “dread disease” policies to be mostly a waste. There was no good reason to purchase a policy that covers cancer, or a heart attack if you had a good major medical policy.

Times have changed and so have I.

Almost every major medical plan on the market uses a drug formulary. The net effect of the formulary is to reduce the carrier’s exposure, especially on some of the more expensive medications.

Unfortunately those are the same medications that can be the difference in surviving an illness or not.

An article by Jill Quadagno has caused me to give even deeper consideration to the usefulness of these single disease policies.

A few years ago my friend Connie’s husband, Michael, died suddenly of a heart attack at the age of fifty-six. After Michael’s death, Connie found herself struggling not only with her grief but also trying to find an affordable health insurance policy. Because she had had one abnormal pap smear, Connie’s best option was to purchase a major medical policy costing $7,000 a year. Her plan will cover any large health expenses she might incur--after she pays the $3,000 deductible. But the plan carries a clause that if her abnormal pap smear turns into cervical cancer, her health insurance will pay none of the costs.

In the last 6 months I have had two clients encounter difficulty finding health insurance because of an abnormal pap smear. Both of these clients, have now been offered the opportunity to shore up their plan with a lump sum cancer plan.

I have also extended this offer to other clients as well.

The lump sum plan is unlike most of the cancer plans on the market. When cancer is initially diagnosed a lump sum cash payment is made to the insured. The amounts can range from $10,000 to $50,000. Benefits are paid even before treatment begins. You do not have to be hospitalized to receive benefits.

Most of the older cancer plans are scheduled reimbursement types. These policies pay a pre-determined amount AFTER you have had the treatment. Like most insurance policies, you submit the bills for review then the carrier decides which bill, if any, will be reimbursed.

The lump sum cancer plans pays in advance. You decide how you want to use the money. It may be to pay regular living expenses, cover deductibles & copays or pay for the medicine and other treatment that is not covered by your major medical.

Cancer plans are no longer bottom shelf items but should be something everyone owns.
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