Justifying Critical Illness Benefit Plans

Benefit plans such as cancer insurance or critical illness insurance can sometimes be hard to justify. Critics argue that limited benefit policies are too niche, and cover only a section of what a more expansive plan would cover.

Forum members came to the defense of limited benefit plans, noting that 1 out of 2 men and 1 out of 3 women will contract cancer during his or her lifetime. Many of these cancers will be serious, and the public outside of the insurance community is well aware of the havoc that can be wreaked on a family paying for long-term illness treatments.

One agent shared, “Within two weeks of being diagnosed [my father] was no longer working. His 50k cancer policy kept him and my mother from losing the house and everything he had worked a lifetime for. That 50k was equal to his annual salary. When he died the life insurance kicked in.”

Other agents disagreed with the idea that critical illness benefit plans should be pursued, noting that more expansive, carefully-chosen health insurance policies would generally cover cancer and long-term illness.

What do you think?