Is Critical Illness Coverage for Cancer Insurance Worth It?

What is cancer?
Cancer isn’t just one disease – it’s an umbrella term for a whole group of diseases that all behave in a similar way. There are more than 100 types of cancer, most of which are named after the part(s) of the body where they form. At its most basic, a cancer is a disease in which the cells that make up our bodies begin to multiply in an unusual or uncontrolled manner. 

When these abnormal cells start to spread, they can sometimes form together into clumps known as tumors. Tumors can be non-cancerous (benign), but when they’re cancerous they can invade new parts of the body and spread (malignant).

It’s important to know that there can be major differences between types of cancer, and the same type of cancer can present differently in different people. Some cancers form tumors; others, like leukemia, might not. Some cancers will spread or invade other parts of the body, while others won’t. For the purposes of this article, we’ll discuss cancer in two broad categories: invasive cancer and noninvasive cancer.

Invasive Cancer

What many people imagine when they think of cancer – cancer that spreads, either through tumors or some other way, from one part of the body to the next.

Noninvasive Cancer

Also known as metastatic cancer or carcinoma in situ, is cancer that stays in the place it originated. Although cancer in this form doesn’t invade other parts of the body, it’s often treated or operated upon as it has a risk of doing so in the future.

Both invasive and noninvasive cancers are covered by many critical illness insurance policies, which we’ll address later in the article.

There are a lot of variances in the costs of cancer treatment – since there are so many types of cancer, and they present in different ways, treatment could include surgeries, experimental drugs, chemotherapy and more. To simplify things, we’ll look at costs for the three most common types of cancer: breast cancer, prostate cancer and lung cancer.

For each of these cancers, we’ll look at two costs – the initial cost, which includes treatment for the year the diagnosis occurs, and continuing costs, which are incurred each of the following years. The costs below are averages, and could change depending on the treatment you undergo and how far the cancer has progressed when it’s discovered, among other factors.

Breast cancer: Breast cancer is the most diagnosed cancer in the United States. It’s most common in women, but it can develop in men as well. The average initial (first-year) cost for treatment is $34,980, with continuing costs of $3,540 each year after.

Prostate cancer: Prostate cancer is found only in men, but it’s the most common type of male cancer. The initial (first year) cost for treatment is $28,109, with continuing costs of $2,603 each year after.

Lung cancer: Lung cancer is common in both men and women. It’s more expensive to treat than the above cancers – the initial (first-year) cost for treatment is $68,293, with continuing costs of $12,388 each year after.

Of course, these are just three types of cancer – the costs can vary dramatically between different cancers, with first year costs as low as $8,537 for melanoma (skin cancer) or as high as $139,814 for brain cancer.  

The biggest factor to keep in mind is how much you’ll pay – if you have health insurance, it’ll cover any payments after you’ve met your deductible, but that can still be a lot of money. If you’re like most Americans, you probably have a high-deductible health plan that can require you to pay up to $7,500 or $15,000 before benefits kick in, depending on whether your health insurance covers just you or your entire family. Factor in the continuing costs of treatment each year after, and even with health coverage you’re looking at a hefty price tag. Thankfully, there’s a better option. 

Critical illness insurance, also known as cancer insurance, dread disease insurance or specified disease insurance, is designed to help people meet the high costs of treatment for serious diseases.  

If you experience a covered disease or health event, like cancer, a critical illness insurance policy will help you focus on recovery by supporting your finances. You get money to use on whatever you need, like replacing lost wages, traveling for treatment, taking extra time off work or paying for medical bills. The payment (or benefit) comes in one simple lump-sum payment.

It’s important to note that critical illness insurance isn’t major medical insurance or comprehensive health insurance. Instead, it works alongside your health insurance to help fill the gap left by high deductibles and out-of-pocket costs. Once you receive your payment, you can use the money wherever it’s needed. 

Learn more: What is Critical Illness Insurance?  

Critical illness insurance covers some of the most common serious illnesses and conditions. Depending on your critical illness insurance policy, it could cover a long list of rare events – but Assurity’s Critical Illness Insurance is simplified to cover the most common conditions and keep costs low for you. It pays a benefit for:

• Cancer (invasive or non-invasive)*

• Heart attack**

• Stroke

• Advanced Alzheimer’s disease

Many critical illness plans reduce the benefit you receive after age 65 to spread risk and keep their costs low – but that’s when you’re most likely to suffer from a critical illness, especially cancer. Because we streamlined our critical illness product, you’ll receive the full benefit amount for any condition at any point in your life.

Learn More: What Does Critical Illness Cover?

Critical illness insurance isn’t the only option for cancer coverage – but it is one of the best options to supplement what you already have. Below, we’ll compare some of the most common types of healthcare coverage, and how they can help you pay for cancer treatment, so you know all the options available to you.

Medicare and Cancer

Medicare is a government health insurance program available to people age 65 and older, and some younger people with disabilities. If you’re enrolled in Medicare, most but not all of your cancer treatment is covered. You’ll need to pay a monthly premium for Medicare Part B, which includes doctor’s visits and services, medical supplies and outpatient care6. You’ll also need to pay an annual deductible with Medicare, which is likely lower than the deductible for most health plans. Medicare does not cover:

• - Room and board in assisted living facilities

• - Long-term nursing home care

• - Adult day care

• - Medical food and nutritional supplements

• - Services to help with activities of daily living like bathing and eating

You can find a full list of the basic costs of Medicare here.

Medicaid and Cancer

Medicaid is a federal health insurance program generally for people with a low annual income. If you qualify for Medicaid, it will likely pay for most of your cancer treatment, although you may still be required to pay some money out of pocket for copayments or deductibles depending on the state in which you reside.

Affordable Care Act and Cancer

The Affordable Care Act provides health plans through Healthcare.gov or state healthcare exchanges. Eligible plans may have some differences, but there are base requirements that they all must meet. Any plan under the Affordable Care Act will cover your cancer treatment, but it behaves much like any other major medical insurance plan. You’ll still be subject to deductibles and copayments until you’ve met your out-of-pocket maximum, which means you could still be left with a large bill for cancer treatment.

COBRA and Cancer

COBRA is a federal law that allows you to keep health insurance coverage if you lose your employer-sponsored health coverage. If you’re eligible for coverage through COBRA, you can keep your existing coverage for a limited period of time. During this time, however, you’ll likely have to pay more for coverage and will be subject to the same deductibles, copayments and coinsurance that you were before – meaning that if you have to pay for an illness like cancer during this time, it could be even more expensive.

The answer depends on your circumstances. But using the information you’ve learned so far, you should be able to get a good idea of whether supplemental critical illness insurance is right for you.

First, you should consider the costs of cancer and the protection you already have in place. Consider these questions:

• How high are the deductibles on your existing health coverage?

• If you were to lose your job or become unable to work, would you still be covered?

• Do you have enough money in savings to cover large medical costs?

• Would your savings be enough to live on if you were undergoing treatment?

If you’d be able to cover the costs of cancer and stay afloat, you probably don’t need a critical illness policy (although it could still help). But if you’re like a lot of people, a serious medical event like a cancer diagnosis could be hard to overcome financially – and that’s why critical illness insurance exists.

An estimated 41 percent of Americans have medical debt — many as a result of a critical illness. As previously mentioned, the current out-of-pocket maximum for a family is $15,000, a fraction of the total cost for cancer treatment. You might incur this cost for multiple years while you or a loved one battles cancer, leaving you with little in the way of funding for everything else you need. On top of that, transportation to and from treatment, lost time at work and various comforts to make the treatment more pleasant all add to the financial cost of a cancer diagnosis. It’s a similar story for other critical illnesses, and one with which too many Americans are familiar.

Think for a moment about the difference even $30,000 in critical illness coverage could make – you’d be able to pay your out-of-pocket costs for several years, and have some money left over to supplement your savings and help make ends meet.

It’s easier than ever to get a critical illness insurance policy – in fact, you can start the process here and apply online in minutes. Then select your coverage and payment options, and you’re on your way to protecting your future. Or, if you’d just like to know how much a policy would cost for you or a loved one, you can use our quoter to get a good estimate.

With all this knowledge in hand, it’s time for the final step — getting a critical illness insurance policy. Check out Assurity’s Critical Illness Insurance for more information, resources and examples.

Get a Quote

Additional disclosure information

LIMITATIONS AND EXCLUSIONS (may vary by state)

Pre-existing Condition. Pre-existing condition means a sickness or physical condition for which, during the 12 months before the issue date or last reinstatement date, the insured person received medical consultation, diagnosis, advice or treatment from a physician or had taken prescribed medication. No benefits will be paid for a critical illness that is caused by a pre-existing condition unless the date of diagnosis is after the policy has been in force for 12 months from the issue date or last reinstatement date.

Waiting Period. Waiting period means the 30 days following the issue date or ten days following the last policy reinstatement date. The date of diagnosis of a covered critical illness must be made while the coverage is in force and after any waiting period. No benefits will be paid if a diagnosis or a medical consultation that leads to diagnosis of invasive cancer or non-invasive cancer occurs during the waiting period. If cancer is diagnosed during the waiting period, benefits will be paid for a subsequent diagnosis of cancer if the insured person is symptom- and treatment-free for at least 12 consecutive months and in complete remission prior to subsequent diagnosis.

Misstatement of Age and/or Gender. If the insured person’s age and/or gender has been misstated, an adjustment in premiums, coverage or both will be made based on the correct age and/or gender. If, according to the correct age, the coverage provided by the policy would not have become effective or would have ceased, Assurity’s only liability during the period in which the insured person was not eligible for coverage shall be limited to a refund of premiums.

Misstatement of Tobacco Use. If, during the first two years of the policy, the tobacco status of the insured person has been misstated, Assurity will revise the policy’s benefit amount to the amount the premium paid would have purchased using the correct tobacco status on the issue date.

The policy will not pay benefits for losses that are caused by or are the result of an insured person:

• being exposed to war or any act of war, declared or undeclared;
• actively serving in any of the armed forces or units auxiliary thereto, including the National Guard or Army Reserve, except during active duty training of less than 60 days;
• engaging in hang-gliding, hot air ballooning, bungee jumping, parachuting, scuba diving, sail gliding, motor vehicle racing, parasailing, parakiting, mountain or rock climbing, B.A.S.E. jumping, sky diving or cave diving;
• being addicted to drugs or suffering from alcoholism;
• being intoxicated (as determined by the laws governing the operation of motor vehicles in the jurisdiction where loss occurs) or under the influence of an illegal substance or a narcotic (except for narcotics used as prescribed to the insured person by a physician);
• committing or attempting to commit a felony;
• being incarcerated in a penal institution or government detention facility;
• engaging in an illegal occupation;
• intentionally self-inflicting an injury; or
• committing or attempting to commit suicide, while sane or insane.

Policy Form No. I H1820 underwritten by Assurity Life Insurance Company, Lincoln, NE.

IMPORTANT NOTICE— CRITICAL ILLNESS INSURANCE PROVIDES LIMITED BENEFIT COVERAGE. It is not a comprehensive major medical plan or Medicare supplement policy and does not satisfy the requirement for minimum essential coverage under the Affordable Care Act (ACA). It is not a substitute for major medical insurance and may not be appropriate for Medicaid recipients.

This policy may contain reductions of benefits, limitations and exclusions. Click here for standard Limitations and Exclusions. Product availability, features, rates, limitations and exclusions may vary by state. The state specific policy form is the ultimate authority for any questions about this product.

*In some states, diagnosis of cancer during the first 30 days following the policy’s issue date results in a significant benefit reduction or policy cancellation. The percentage benefit amount payable for invasive and non-invasive cancer combined cannot exceed 100%.

**Heart attack does not include established (old) myocardial infarction occurring prior to the issue date, sudden cardiac arrest, cardiac arrest or cardiopulmonary arrest.

Assurity reserves the right to order, at the company’s expense, evidence of insurability which the company feels is necessary for the prudent evaluation of the risk.

Assurity is a marketing name for the mutual holding company Assurity Group, Inc. and its subsidiaries. Those subsidiaries include but are not limited to: Assurity Life Insurance Company and Assurity Life Insurance Company of New York. Insurance products and services are offered by Assurity Life Insurance Company in all states except New York. In New York, insurance products and services are offered by Assurity Life Insurance Company of New York, Albany, NY. Product availability, features and rates may vary by state.