Life Insurance for Cancer Patients


Life insurance refers to a contract entered by the policy owner with an insurance company, whereby the insurance company is expected to pay an agreed amount upon the death of the policy owner. There are varied reasons for purchasing life insurance, among these are: financial assistance and planning, paying funeral costs and other final expenses, paying off debt and to gain tax benefits as appropriate.

life insurance for cancer patients


Cancer patients’ and survivors’ access to available life insurance is determined by several factors depending on their treatment plan. There are insurance companies offering insurance policies to clients after being diagnosed with cancer.

What are the types of Life Insurance?

Life insurance comes in two forms, namely, term life insurance and permanent life insurance. Term Life Insurance gives only a specified life insurance benefit for an indicated term or period of time. If the policy owner dies during the indicated term period, the chosen insurance company will give face value payment to the individual’s beneficiaries. If the owner lives past the term period, the insurance policy simple ends without any payment. This type of insurance requires lesser expenses to get a greater amount of coverage; however, the premium costs commonly increase when renewing insurance.

The Permanent Life Insurance, on the other hand, covers the policy owner for a lifetime as long as premiums are paid. The life insurance benefit is paid out and its value accumulates in time on a tax-deferred reason.  There are also four kinds of permanent life insurance, which cover: whole life insurance, variable life insurance, and variable universal life insurance. Whole life insurance premium payments are fixed, it covers an individual’s entire lifetime and the return of cash value is guaranteed. Variable life insurance is for lifetime coverage which allows for the allocation of a portion of the premium to a separate or different savings account, which can be invested as an equity fund, fund for money market, and to obtain bonds. Universal life insurance involves coverage with the possibility of growth of the owner’s account value in the form of investments. Premium payments can also be adjusted within limits.


What are Life Insurance Riders?

Riders refer to the special additional benefits and features of the insurance policy. They come in four types: waiver of premium, providing exception of premium payments during time of disability; accidental death benefit, an additional amount to be given to the owner’s beneficiary upon accidental death; guaranteed insurability, allowing for  purchase of additional coverage without the need of medical underwriting; and accelerated death benefit, which allows the individual to collect a part or all the benefits after diagnosis of a terminal disease or if the owner requires to be admitted for a long-term care or to a nursing home.

What insurance plans are available for cancer patients?

Cancer patients can choose from three types of insurance plans. First, is the fully underwritten insurance plan, the cheapest with benefits payable upon receiving the issued plan. Second is the simplified issue plan where the applicant answers series of predetermined health concerns. And third is the guaranteed issue plan with a waiting period of one to three years before the benefits are rendered.


What are the private health insurance options for cancer patients?

The Affordable Care Act (ACA) stipulated the need to make private insurance more affordable to cancer patients and other people with serious ailments. Employed cancer patients are now allowed to buy a different insurance policy through the health insurance marketplace and be given additional financial assistance to pay for the policy. There are also major changes in the individual private plans where a lot of insurance policies now cover individuals with pre-existing cases such as cancer.

Where to purchase private insurance policy?

Insurance coverage can be purchased online, via phone, mail or in a person-to-person manner from health insurance marketplaces. The plans have to be checked to ensure that they meet the ACA requirements. The healthcare law states that all plans sold in the marketplace should cover essential health benefits, e.g. screenings, treatment and additional follow-up care.


What are the pointers to remember when purchasing Life Insurance?

The individual is advised to check with different insurance companies for the kind of insurance policy that best fits him or her. Consider group life insurance policy with the aid of a professional or organization. A “graded” insurance policy should be taken into account if full life insurance benefits are not feasible. This policy specifies limits in benefits which may require a beneficiary to obtain a full benefit within a certain time period.

How to get the most from managed care plans?

Managed care plans coordinate the health care of clients. They include health maintenance organizations (HMOs), with limited or selected network of providers and facilities, and the Preferred Provider Organizations (PPOs) with wider network of providers. Costs can be reduced  by negotiating costs with healthcare providers, clinics or hospitals with the planned surgeries or other procedures. The cancer patient is advised to contact the insurer to know what the company will be shouldering and how much will be paid.

What are viatical settlements?

Cancer management is truly expensive leaving many patients and their families exhausted financially. Viatical settlements are an option to lighten the financial burden of the already afflicted suffering patients. This refers to selling one’s life insurance policy to a certain company for an immediate cash settlement. The payment of the insurance policy is lower than its face value. The company becomes the new policy owner and will be paying all succeeding premiums and collect the full benefits when it matures.  The beneficiaries, however, will no longer receive any form of benefits after the policy is sold.

References

American Cancer Society (2015).Getting money from life insurance policies.American Cancer Society. Retrieved from http://www.cancer.org/treatment/findingandpayingfortreatment/managinginsuranceissues/healthinsuranceandfinancialassistanceforthecancerpatient/health-insurance-and-financial-assistance-life-ins-policies

American Cancer Society (2015).Health Insurance and Financial Assistance for the Cancer Patient: Covering the costs of cancer treatment. American Cancer Society.

American College Health Association.(2015). Affordable Care Act and Student HealthInsurance.Retrieved from http://www.acha.org/Topics/Affordable_Care_Act/FAQs_for_IndividualCoverageClassification.cfm.

Cancer Legal Resource Center (2013).Life Insurance. CLRC: Cancer Legal Resource Center, Los Angeles, CA. Retrieved from www.CancerLegalResourceCenter.org

Centers for Medicare & Medicaid Services.(2013). Children’s Health Insurance Program.Retrieved from at www.medicaid.gov/chip/chip-program-information.html

Centers for Medicare and Medicaid Services.The Center for Consumer Information &Insurance Oversight (CCIIO).Health Insurance Market Reforms.Retrieved from www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/index.html

MD Anderson Cancer Center.(2015). Legal and Financial Impacts of Cancer.The University of Texas MD Anderson Cancer Center. Retrieved from http://www.mdanderson.org/patient-and-cancer-information/cancer-information/cancer-topics/survivorship/side-effects-of-cancer-treatment/legal-impact.html

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