What do you think about supplemental insurance?
Chances are you’re on one side of the fence or the other. There are those that feel any supplemental insurance is a duplicate of group or individual health insurance plan benefits and recommend that you not buy it. On the other hand, others feel more secure having supplemental coverage, they like the additional coverage, and they highly recommend it. Who’s right?
Actually, they both are. If you have a comprehensive health insurance plan through your employer, an individual health insurance policy you purchased, or are on Medicare, you may not need supplemental coverage. Unless — you want to eliminate some or all of your out-of-pocket costs or just enjoy the peace of mind knowing you’re covered for the maximum amount possible.
If you aren’t on a group plan through an employer and have no individual health insurance, or you have an individual policy with many gaps or a schedule of benefit payments that leaves much to be desired, supplemental coverage makes good sense.
In this article, we’ll look briefly at the different types of supplemental insurance being sold by agents and brokers today, and we’ll then zero in on a very well-known company that sells supplemental insurance: Aflac. We’ll look specifically at one of their best-sellers: Aflac cancer insurance, and finish up with some FAQs.
When discussing supplemental coverage options one-on-one with an insurance agent or learning about them at a benefits meeting at work, you may have been surprised, or overwhelmed, at the variety of different types of protection you had to choose from. They probably included:
- Cancer insurance
- Accident insurance
- Critical illness insurance
- Hospital insurance
- Fixed indemnity insurance
- Disability insurance
- Life insurance
- Long-term care insurance
It’s important to keep in the forefront of your mind that supplemental insurance coverage does not replace health insurance. Instead, supplemental insurance is precisely what the name implies — a supplement to other coverage, much like you take a vitamin supplement to help satisfy your nutritional needs.
According to the American Cancer Society, 1 in 2 males and 1 in 3 females will develop invasive cancer during their lifetime. Bear in mind that these are averages for the overall U.S. population. An individual’s propensity may be higher or lower than these numbers, depending on their particular risk factors, such as smoking and drinking habits, diet, exercise level, family history, etc.
As you may already know or can imagine, the cost to treat cancer is exorbitant, and climbing. According to Aflac, the average cost of lung cancer is $156,938. This would include expenses for a biopsy and other tests, diagnosis, doctor’s and surgeon’s costs, treatment, and many other related expenses.
How could Aflac cancer insurance help? Let’s look at an example for someone who was diagnosed and treated for lung cancer and had a group health plan with a $1,500 deductible and 80/20 coverage:
- Medical expenses for lung cancer: $156,938
- Health insurance plan deductible: $1,500
- Insurance Coverage: 80%
- Remaining Expenses: $31,088
In this case, Aflac supplemental cancer insurance would reduce the remaining expenses by almost 50% after paying a benefit of $14,436.
The amount Aflac will pay you depends on the type of cancer diagnosed, the type of treatment received, and the duration of that treatment.
Another scenario that Aflac uses to illustrate the potential benefits that could be paid is this: a policyholder suffering from frequent infections and high fever visited their physician, who recommended a bone marrow biopsy. The insured received a diagnosis of leukemia and underwent treatment. As a result, Aflac paid a total of $32,150 in benefits.
This is based on an example for Aflac Cancer Protection Assurance – Option 3 that includes the following benefit conditions: Bone Marrow Biopsy (Cancer Screening Benefit) of $100, Initial Diagnosis Benefit of $6,000, IV Chemotherapy for 3 months (Physician-Administered Radiation Therapy, Chemotherapy, Immunotherapy, or Experimental Chemotherapy Benefit) of $4,500, Immunotherapy (Physician-Administered Radiation Therapy, Chemotherapy, Immunotherapy, or Experimental Chemotherapy Benefit) for 6 months of $9,000, Antinausea Benefit (9 months) of $1,350, Stem Cell Transplant Benefit of $10,000, Hospital Confinement Benefit (4 days) of $1,200.
Questions asked at group benefits meetings and by individuals considering Aflac and supplemental coverage commonly include these:
How much does Aflac’s cancer insurance cost?
One of the negative comments you’ll often hear about Aflac’s cancer insurance policy is that Aflac doesn’t offer online quotes. However, one of their major competitors, Mutual of Omaha, provides online quotes and gives a monthly rate of $9.97 for a 40-year old female.
You’ll need to speak with an agent or broker that sells Aflac cancer insurance to get a quote based on your age and gender, but Aflac advertises that its weekly rates are “as low as a gallon of milk.”
Which other companies offer supplemental cancer insurance?
Some top-rated companies sell group or individual cancer policies, including Cigna, Allstate, Mutual of Omaha, and United Healthcare.
Does critical illness insurance coverage include cancer coverage?
Some critical illness policies, like those offered by Breeze, do include coverage for cancer. Critical illness policies are very popular because, besides providing cash benefits paid directly to the policyowner for cancer, other illnesses are also covered, such as heart attack, stroke, paralysis, kidney failure, and more.
What is excluded from cancer coverage?
As you should with any insurance coverage you’re evaluating, read a potential cancer insurance policy judiciously before you apply for it. You’ll find that some cancer policies don’t cover certain cancer types, such as non-melanoma skin cancer, or side effects from cancer treatment, including pneumonia or dehydration.
Is cancer insurance worth it?
Cancer insurance is probably worth it if:
- You don’t have a traditional health insurance plan
- Your health insurance plan coverage is limited
- You have a high-deductible health plan
- You have a family history of cancer
The best way to make a final decision about buying cancer insurance is to talk with an insurance agent or broker that represents multiple insurers that offer cancer insurance plans. Some agents exclusively sell Aflac supplemental insurance plans, but they won’t be able to provide you with comparable and competitive plans and pricing.
Learn More: Is Cancer Insurance Actually Worth It For You?
Having grown up in upstate New York, Bob Phillips spent over 15 years in the financial services world and has been making freelance writing contributions to blogs and websites since 2007. He resides in North Texas with his wife and Doberman puppy.
The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.