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Insurance for cancer patients, survivors, and high-risk individuals

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When you receive the devastating diagnosis that you have cancer, there's no question you need health insurance to pay for your costs.

A report from the American Cancer Society Cancer Action Network (ACS CAN) reported cancer patients spent $5.6 billion in out-of-pocket costs for cancer treatment in 2018. Overall, cancer cost $183 billion in direct cancer-related health care in the U.S. The report projects that this amount will reach $246 billion by 2030.

Besides health insurance, what other types of insurance do you need? What should you know about life, disability, critical illness, and cancer insurance? Let's find out.

Health insurance for cancer patients

If you have a preexisting condition, such as cancer or other chronic illness, health insurance companies can't refuse to cover you. Your insurance company also cannot charge you more just because you have a preexisting condition.

What to know when you're healthy

Nobody wants to assume they'll get cancer. However, let's play a not-so-fun game. Let's assume you will get cancer. Do you know the basics of your health insurance plan?

Does your employer participate in an HMO, PPO, or POS plan? If you have the opportunity to switch health plans, playing that game may help you choose the right plan for your needs due to your family history and the likelihood of getting cancer.

For example, consider where you'd like to receive treatment. Let's say you live in Wisconsin and would like to go to the world-renowned Mayo Clinic for surgery and treatments. Your HMO may not allow you to go out of state for treatment, but a PPO plan might give you the flexibility to cross state lines. Knowing the details of your health plan can help you prior to a cancer diagnosis.

What to know if you become sick

Knowledge is power if you, unfortunately, become one of the millions of Americans who contract cancer. However, you have some options, and they involve trying to learn as much as possible about the type of cancer you have and available treatments. Asking your doctor in advance can help you plan for and deal with the costs related to your individualized treatment plan.

Ask about the expenses for the following:

  • Doctor and clinic visits
  • Lab tests
  • Procedures, including imaging
  • Radiation treatments
  • Chemotherapy and other drug costs
  • Hospital stays and surgery
  • Home health care

Know whether these procedures require copayment and coinsurance and know what you'll pay ahead of time. When you get bills in the mail, check them over carefully to figure out whether your bills make sense. You want to keep careful records of every hospital stay, bill, and receipt so you can keep track of it all.

What to know upon recovery

After recovery, you still might have to get outside treatments, such as physical therapy or reconstructive surgery (such as in the case of breast cancer). You want to make sure these specialists exist within your health insurance plan.

Follow up on any paperwork related to your treatment, whether you still need to square things away for sick leave, outstanding bills, and more. Learn how your doctor’s office handles bills and how it continues to interface with your insurance company.

You may need more care down the road, particularly if your cancer returns. Know what your insurance carrier covers in terms of home health visits, palliative care, and mental health counseling.

Knowing the ins and outs of how your insurance works puts you in the driver's seat and gives you more control over the direction of your care.

Critical illness and cancer insurance

Unfortunately, there are many situations in which health insurance simply isn't enough. With exorbitant medical bills stacking up, even the best health insurance plans may not cover what you expect them to (let alone those with gaps in coverage).

That's why it's important to understand the types of supplemental health insurance that are available to fill the gaps. For serious illnesses such as cancer, there are two similar, but different, types of coverage to know.

  • Critical illness insurance pays a lump sum benefit you experience a diagnosis of a covered illness, such as cancer, heart attack, stroke, and more.
  • Cancer insurance also provides benefits, typically in the form of a lump sum, but only for a diagnosis of cancer.

Both can offer cancer patients additional coverage for medical emergencies like cancer. Cancer usually costs more than typical treatments for other illnesses, so these policies pay out cash to help you with extraneous costs when traditional health insurance doesn't cover you.

What to know when you're healthy

As with most types of insurance, consider tapping into critical illness insurance early on in life. Many employers offer group critical illness insurance. Find out if your employer offers early on in your professional career. Sometimes employers cover the full cost! You may also take the coverage with you if you no longer work for your current company. This is called a portable policy.

You can buy an individual critical illness insurance policy from various carriers. Some offer critical illness coverage as an optional rider. Insurance companies often cover just a handful of critical illnesses and others cover dozens.

What to know if you become sick

Let's say you opt for critical illness insurance. Then, you have the bad luck to find out that you have cancer before the elimination period ends. If you applied for critical illness insurance just one month ago, then you may not receive the benefit to cover your immediate expenses upon your initial diagnosis. It might take up to 90 days, depending on the insurance company's policies.

How do critical illness policies work? The insurance company pays a lump-sum benefit amount following the diagnosis of a covered condition. After diagnosis, you submit a claim for benefits, and the insurance company pays you directly.

What to know upon recovery

You can use critical illness insurance for many things, including medical services, treatments not on your policy, daily living expenses, transportation, and more. Keep this in mind down the road if your cancer does return. (Unfortunately, cancer can recur years down the road.)

Whether you're terminally ill or just need a place to recuperate, you can even use critical illness funds to take a vacation with friends or family.

Life insurance for cancer patients

One common question when individuals contract cancer: "Can I get life insurance now that I have cancer?" Let's find out.

What to know when you're healthy

The best time to get life insurance? When you're healthy.

It boils down to this: You should buy life insurance when you're younger. The most obvious reason to opt for life insurance when you're 30 instead of 49 is that you'll qualify for lower premiums. As you get older, health problems like cancer may prevent you from qualifying for life insurance.

What to know if you become sick

If you currently have cancer or have been receiving treatment for cancer, you cannot purchase a term or whole life insurance policy. Furthermore, if you have had cancer within the past two to four years, you may not qualify for life insurance.

However, you might see some rays of sunshine with a guaranteed issue life insurance policy as long as you meet the insurer’s age requirements.

What is guaranteed issue life insurance? It's a type of whole life insurance in which you do not need to undergo a medical exam or answer complex medical questions. However, coverage amounts aren't high for this type of policy — you may only get $25,000 or less. Many policies even max out at a $10,000 death benefit.

Along with lower benefit amounts, you'll pay a lot in premiums for this type of insurance. However, the final amount may pay for your funeral expenses if you have terminal cancer.

What to know upon recovery

You may have a better chance to qualify for a term life or permanent life insurance policy if you're in remission. Many life insurance companies will require you to prove that you've been cancer-free for a certain number of years. This often depends on the type of cancer you had.

Whether you can get life insurance also depends on the severity of cancer you had at the time of your diagnosis. For example, if you had stage 1 melanoma, you'd have a shorter waiting period than if you had metastatic cancer (cancer that has spread). Waiting periods vary from insurer to insurer.

Get several quotes from various insurance companies before you choose the best life insurance policy for you.

Learn More: Life Insurance for Cancer Patients

Disability insurance for cancer patients

Disability insurance, also called disability income insurance or income protection, covers you when you become disabled and cannot work. This type of coverage replaces a portion of your monthly income if injury or illness prevents you from working. It's one of the most important ways to protect your income stream if you can't work.

What to know when you're healthy

The most important fact to know when you're healthy: More than 25 percent of today's 20-year-olds will experience a disabling event that prevents them from working for at least three months before retirement. The bottom line: Disability insurance is a worthy investment.

Also, remember that even though you can get disability insurance through your employer, it might not be enough. Furthermore, you might have to quit your job if you become too ill to work, switch to a job that doesn't offer disability insurance, or become self-employed.

What to know if you become sick

Disability insurers take several factors into consideration before they offer you a particular disability insurance policy. They consider your age, gender, health history (including cancer diagnoses), occupation, annual income, and where you live.

However, many long-term disability cancer claims end up getting denied. Approval depends on insurance company policy specifications and the severity of your illness.

Remember that if you do get approved, you must go through an elimination period. The elimination period refers to a time period between when an injury occurs and when you receive benefit payments. Elimination periods for long-term disability can range from as little as 30 days or as long as a year. The standard length usually runs from 60 to 90 days. This may put you at a disadvantage because you might not get disability insurance in time, depending on when you sign up.

What to know upon recovery

You want to continue disability insurance even after your cancer goes into remission. If your cancer comes back, you could need disability insurance for an extended period of time. Buy disability insurance from a reputable company.

Learn More: Disability Insurance for Cancer Patients

What types of coverage do you need?

Which type of insurance works best for you? Whether you think you need every single piece of insurance (some people do!) carefully consider what you need at the opportune moment — when you're healthy. You may never need to use these types of insurance (with the exception of health insurance, which you should never go without), but if you do, you'll breathe a sigh of relief.

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.

— Published June 3, 2021
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