What is Cancer Insurance?

With cancer insurance coverage, policyholders are paid out a lump sum after being diagnosed with cancer and filing a claim. Policyholders can use the payout in whatever way they need it the most, whether it’s paying the remainder of a deductible or covering personal expenses.

With premiums as low as $20 a month often paid entirely out of pocket by employees, cancer insurance can provide peace of mind far more valuable than the cost of the policy. Plus, this kind of supplemental insurance coverage provides much needed financial security in a time that can be marked by uncertainty for the recently diagnosed.

Most if not all traditional health insurance will include some forms of cancer coverage within the standard policies. However, even when the types of cancer that are covered within a policy includes a broad range of potential diagnoses, and even if that policy has manageable deductibles and copays, there are often so many tangential expenses that come with cancer treatment that the costs can quickly spiral out of control.

In fact, according to a 2019 report by NPR, cancer patients are almost 3 times more likely to file for bankruptcy than people without cancer.

In short, having cancer is expensive, not only because of the hospital bills but also because of the time away from work, the cost of travel and hotel rooms near the clinic, and paying for extra help around the house. This is not to mention any non-covered “experimental” treatments and supplementary medication that a given patient may choose to pursue as a course of treatment.

A cancer diagnosis can in many ways eclipse the benefits provided solely by traditional health insurance, which is why many employers offer supplemental coverage via cancer insurance.

Voluntary cancer insurance can help employees better manage many of the medically adjacent and non-medical expenses that so regularly go hand-in-hand with a cancer diagnosis.


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Why are More Employers Providing Voluntary Cancer Insurance?

According to the National Cancer Institute at the National Institutes of Health, over 1.8 million Americans are projected to be diagnosed with new cancer cases over the course of 2020.

In total, nearly 40% of all Americans are expected to be diagnosed with some form of cancer in their lifetime.

With the prevalence of cancer diagnoses in mind, consider that the American Cancer Society’s Cancer Action Network determined that the average patient diagnosed with one of the three most common forms of cancer – breast cancer, lung cancer, and colorectal cancer – will pay between on average somewhere around $6,000 out-of-pocket if insured under an employer-sponsored health plan, or $10,000 for an average plan offered through an ACA exchange.

With cancer diagnoses becoming such a common and unfortunate part of American life, and with the often seemingly unmanageable bills that accompany such diagnoses including copays and coinsurance, time away from work, childcare, and travel and accommodation expenses that can be necessary when pursuing the best possible treatment, it is no surprise that employees are seeking additional support wherever they can find it.

In addition to offering traditional health insurance options and group plans with thorough cancer-related coverage protection, employers are well-positioned to implement additional structure and administrative support to help employees navigate the often nebulous and confusing process of managing all the various support systems that cancer patients may have available to them.

More employers than ever are taking the opportunity to provide cancer insurance and supplemental support systems to help their employees optimize their path to recovery.

This can not only save costs and inspire additional gratitude and loyalty among receiving employees, but it will also ensure those employees are healthy and ready to return to life and work as quickly and productively as possible.



Besides Offering Cancer Insurance, What Else Should Employers Do?

As one can probably imagine, receiving a cancer diagnosis can be a somewhat disorienting experience that leaves many people confused about what to do next. Such a bewildering, life-altering occurrence does not tend to lend itself to a calm, measured response on the part of the patient, but just such a response – one that allows them to first take stock of the support and resources that are available to them – is exactly the kind of response that is in their best interest.

Perhaps the best way for employers to positively impact their employee’s response and experience after having just been diagnosed with cancer begins long before that diagnosis is ever made.

In addition to offering health insurance options and cancer insurance coverage, employers have the opportunity to help their employees from an organizational standpoint, beginning by repeatedly making it very clear that an employee who receives a cancer diagnosis should immediately report that diagnosis to the company’s benefits manager.

From there, the benefits manager can help walk the employee through some of the processes that will be happening around them as a result of the diagnosis.

Taking it a step further, the benefits manager might even assist in the coordination of the many people that the employee might need to be in contact with, including health care professionals like case workers, oncologists, and potentially private nursing options as well as representatives from the insurance provider, financial advisors, and rehabilitation and recovery experts.

In these instances, employers are often in the good position to serve in an administrative partner capacity to ensure that all of the various people and entities involved are not only in contact with the employee/patient, but are also in contact with each other in order to minimize the additional stress and effort expended via answering redundant questions, for example.

Helping to coordinate these people, entities, and processes can be of invaluable help and significance to an employee during a time when they need all the help that they can get, which in turn increases the likelihood of optimized outcomes to the mutual benefit of everyone involved – most importantly of course, the patient.




What is a Good Cancer Insurance Policy?

As with most insurance offerings, the difference between a good cancer insurance policy and a bad one usually depends upon the individual needs of a given policyholder.

Obviously, any policy that has a broader range of types of cancer that are covered provides more protection than a policy with a narrower range. However, that broader range almost certainly comes at the cost of a higher premium, more restrictions on claims, and a lower overall payout-to-premiums-collected ratio across all policies of this sort for a given provider.

Often the most important factor for a would-be cancer insurance policyholder to consider is, ‘How will this policy work within the context of my existing insurance portfolio?’

To answer this along with any other questions a would-be employer or prospective policyholder may have, it is generally a good idea to speak directly not only with your current business insurance broker, but also to contact a broker who specializes in cancer insurance and related benefits.

To search for a broker in your area who has cancer insurance experience and is knowledgeable of the needs specific to your industry, search Mployer Advisor today.


professional woman talking on the phone


Top 5 Questions to Ask a Broker About Cancer Insurance and Benefits

  1. Are there any specific types of cancers that are not covered by either traditional health insurance coverage, and are also not covered under the cancer-specific insurance policy in question? If so, how might that coverage gap be addressed in a more comprehensive insurance portfolio?

  2. What medical information, history, and/or examination is required, and how much will premiums cost relative to the size of the lump sum payment made when claims are filed and processed?

  3. Are any additional administrative or support systems made available to policyholders beyond the lump sum claims payment?

  4. Are all forms of cancer treated equally under the policy? Is there any practical distinction regarding the stage of the cancer at the time of diagnosis, and how does the policy handle repeat events, recurring cancer, and or multiple forms of cancer diagnosed at the same time?

  5. What additional types of insurance (potentially including short term disability insurance, long term disability insurance, hospital indemnity insurance, and critical illness insurance) would best complement voluntary cancer insurance coverage in order to optimize risk mitigation and breadth of coverage?


About Mployer Advisor

At Mployer Advisor, our focus is creating transparency in the insurance and insurance broker, consultant and advisor space to the advantage of the employer. Analytics is our core and we will bring to light new information, tools and resources to aid employers in making more cost-effective decisions. As a phase I, we are here to help employers find the right broker or consultant and the right insurance company for them. Giving choice and initial transparency is a first step in creating an employer centric insurance marketplace.