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June/July 2016  Volume 7, Number 3        
 

life insurance

Enhance Your Benefit Plan with Cancer and Critical Illness Insurance

The move toward “consumer-driven” health care has created a fair amount of anxiety among employees. High deductibles, limited formularies and uncovered transportation costs can eat through an afflicted employee’s savings quickly. One way to provide peace of mind is critical illness insurance.

Modern critical illness coverage bears little resemblance to the cancer insurance marketed in the 1960s and ‘70s. Critical illness insurance offers coverage for heart attack, stroke, kidney failure, coma, coronary artery bypass, loss of sight, speech or hearing, major organ transplant, paralysis, severe burns, as well as several types of cancer.

Unlike the dread diseases of the 20th century, these conditions are chronic conditions rather than death sentences. But that means higher long-term healthcare costs. For instance, skyrocketing chemotherapy and adjunctive therapies costs often exhaust even catastrophic insurance policy limits. Adjunctive therapies, those that ease chemotherapy symptoms, can cost as much as $10,000 per round of treatment.

Critical illness insurance’s new face, coupled with consumer-driven healthcare, demands new products. Current-day critical illness insurance owes its existence to Dr. Marius Barnard, brother of heart-transplant pioneer Dr. Christiaan Barnard. He invented the product to address the financial difficulties heart transplant recipients battled.

The policies fall into two types, lump-sum payment and reimbursement. Under lump-sum payment policies, the beneficiary receives a lump sum for a covered diagnosis according to a policy schedule. Policies face amounts range from $5,000 to $100,000, but average around $20,000.

Reimbursement policies pay on a per-event basis. Although these policies pay set per diem rates for hospitalization and recuperation time, they often cover items that are not covered by catastrophic health plans. For instance, one insurer offers coverage for transportation and lodging for family members when transporting a patient to see a specialist.

Underwriting is relatively lax for these policies. Workers who can demonstrate being cancer-free for ten years generally can find cancer coverage. Only extreme family histories, such as a parental death by stroke prior to age 60, preclude coverage under a cancer or critical illness policy.

“Sandwich generation” baby boomers appear to be the hot market for critical illness insurance. As they face their own set of health problems, they are often arranging care for elderly parents. They face hidden healthcare costs such as private duty nurses, transportation and lodging costs to see specialists, and uncovered, possibly experimental or off label, unpermitted use of drugs.

Aging boomers in particular face heightened risk of stroke and heart attack. Stroke rates for men 45 to 54 run about 2 percent. That figure doubles for men ages 55 to 64. Those figures parallel heart attack rates of 5 percent and 10 percent, respectively.

Critical illness insurance can be another nugget to help retain valuable baby boomer workers. Employers can offer it as either a paid or voluntary (employee-paid) benefit. As a voluntary benefit, employees have the benefit of group rates, which might be lower, along with the convenience of payroll deduction payment. For more information, please call us.

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In this issue:

This Just In...

Long-Term Care Helps Boomers Ensure Quality Care, Preserve Estates

Enhance Your Benefit Plan with Cancer and Critical Illness Insurance

Legal Plans Help Employees Stress Less

Enrolling Non-Native English Speakers

 

 


The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher’s permission. All rights reserved. ©2015 The Insurance 411. Tel. 877-762-7877. www.theinsurance411.com