The Case For Cancer Insurance

[rousemark]

Depends on the trigger for the benefits. Are there life policies that trigger a benefit for being diagnosed with cancer? Or having a hear attack or stroke?

The life policies I’m familiar with are triggered by nursing home confinement or terminal diagnoses with months expected to live.

There are plans that offer both critical (diagnosis of certain diseases) or chronic illnesses (inability to perform ADLs or diagnosis of some form of dementia) … The AGLA/AIG ULs and Term plans included those riders at not cost back when I was with them before I "retired" and they are still offered.

The problem with the no cost riders is you do not know how much you may receive. For example, assume you are diagnosed with cancer. You file a claim and they will make an offer based on how your particular diagnosis affects your mortality. If you have a $100,000 policy, they may offer you $30K in exchange for you surrendering $80K of your death benefit. If you accept it, then the remaining $20K would remain in force at the appropriate premium for that amount.

While that cash might help you survive the cancer financially, it plays havoc with the life insurance needs. For example if you bought the policy to pay off your mortgage, there is no longer the money available to accomplish that for your family. And, now your health is such that you can't replace the coverage. So, what initially seemed like a blessing has become a burden for the survivors.

 

[Newby]

There are plans that offer both critical (diagnosis of certain diseases) or chronic illnesses (inability to perform ADLs or diagnosis of some form of dementia) … The AGLA/AIG ULs and Term plans included those riders at not cost back when I was with them before I "retired" and they are still offered.

The problem with the no cost riders is you do not know how much you may receive. For example, assume you are diagnosed with cancer. You file a claim and they will make an offer based on how your particular diagnosis affects your mortality. If you have a $100,000 policy, they may offer you $30K in exchange for you surrendering $80K of your death benefit. If you accept it, then the remaining $20K would remain in force at the appropriate premium for that amount.

While that cash might help you survive the cancer financially, it plays havoc with the life insurance needs. For example if you bought the policy to pay off your mortgage, there is no longer the money available to accomplish that for your family. And, now your health is such that you can't replace the coverage. So, what initially seemed like a blessing has become a burden for the survivors.

Yes that sounds like a “sales” feature not a real world benefit that most would ever choose to use if they understood it.

 

[LostDollar]

This article came my way in a newsletter today.

Jump in cancer diagnoses at 65 implies patients wait for Medicare, according to Stanford study

 

[mudhound]

I like the lump sum plans too. The others are ok.

 

[whatsgoingon]

Any cancer plans with a 3 year lookback?

 

[rousemark]

Any cancer plans with a 3 year lookback?

None that I know of. 5 yr seems to be the shortest.

 

[shonceman]

How does a lump sum cancer or critical illness benefit affect eligibility for Medicaid or other public assistance?

 

[Life Hawk]

How does a lump sum cancer or critical illness benefit affect eligibility for Medicaid or other public assistance?

Based on IL regs, they ask on the app. It can cause problems down the road if the state pays for treatment and then seeks funds from the lump sum, or even pay for treatment plans.

 

[Life Hawk]

Any cancer plans with a 3 year lookback?

To most that will be a 10 year look back. It is also often based on type of caner and treatment. Keep in mind the look back will included or most likely included the wording "when where you last treated for cancer". This can create an issue as some cancers you are treated for initially through surgery, but follow-up treatment (medication) can last for years.