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Facing a cancer diagnosis can be overwhelming, both emotionally and financially. The cost of treatment, even with primary health insurance, can be significant. This is where cancer insurance comes in. It can provide a financial safety net during a challenging time, helping individuals manage the out-of-pocket costs associated with cancer treatment.
However, it’s important to understand how this specific coverage works and whether it’s the right fit for you. This blog post will explore the benefits and drawbacks of cancer insurance, compare it to critical illness insurance, and guide you toward making an informed decision about your financial protection.
What Is Cancer Insurance?
Cancer insurance insurance is a form of supplemental health insurance designed to offer financial protection when faced with a life-threatening cancer, including carcinoma, melanoma, leukemia, lymphoma, and sarcoma.
Unlike critical illness insurance, it focuses specifically on cancer diagnoses. Upon diagnosis of a covered cancer as defined in the policy, the policy pays the insured person a tax-free lump sum payout. This money can be used to cover medical costs not covered by provincial health insurance, lost income, or other expenses incurred during the illness.
Cancer insurance plans have a 90-day waiting period before coverage starts. This is to prevent individuals who suspect they are developing cancer from buying a policy and immediately claiming benefits.
Benefits of cancer insurance
Cancer insurance caters specifically to individuals concerned about the financial burden of a cancer diagnosis. Here are four reasons why it might be a good fit for you:
1) Cost-Effective: Compared to critical illness insurance, which covers multiple illnesses, cancer insurance often comes with lower premiums. This can be especially attractive for individuals concerned primarily about cancer risks and seeking affordable financial protection.
2) Simplified Process: Unlike some insurance requiring medical exams, many cancer insurance plans skip these, making the application process faster and easier. This can be beneficial for individuals with pre-existing conditions or those who prefer a streamlined experience.
3) Straightforward Coverage: Cancer insurance policies are generally easier to understand compared to broader critical illness plans. They focus on specific types of cancer listed in the policy, making the coverage and potential payout clear.
4) Targeted Protection: Cancer remains a leading cause of claims for both individual and group cancer insurance plans. This means the policy directly addresses a significant risk for many individuals seeking financial assistance, specifically in the event of a cancer diagnosis.
Drawbacks of cancer insurance
While cancer insurance offers benefits, several limitations exist:
1) Limited Scope: Unlike critical illness insurance, cancer insurance only covers specific types of cancer listed in the policy. This excludes other critical illnesses like heart attack, stroke, or organ failure, which also present significant financial burdens.
2) Capped Payouts: How much coverage you can get for cancer insurance is limited, often capped at a maximum amount like $25,000. Depending on the cost of treatment and lost income, this might not be sufficient to cover all expenses.
3) Rising Costs: While the initial premium might be lower than critical illness insurance, it’s not guaranteed and can increase significantly every year, potentially becoming unaffordable over time.
4) Limited Flexibility: Unlike some insurance options, cancer insurance often lacks features like a return of premium if you don’t claim benefits or the option to convert the policy to a longer-term plan if needed.
5) Limited Coverage Period: Most cancer insurance plans don’t offer lifetime coverage. This means protection ends after reaching a specific age, potentially leaving individuals vulnerable to future risks without continued coverage.
Companies Offering Cancer Insurance
Several insurance companies offer cancer insurance coverage. Here are some of the leading providers in Canada:
iA Financial Group
iA Financial Group’s CancerGuard offers up to $150,000 of coverage with 50% (up to $25,000) payable for minor cancers. Its various plan types (term-10, term-20, term-75) provide flexibility based on your protection needs, although premiums are not guaranteed. The instant approval with no medical exam makes it easy to qualify for, although you still need to purchase it through a licensed insurance advisor.
Uniquely, it has a return of premium at expiry option that gives you back 50% of the premium paid if you haven’t made a claim. It also includes the MediGuide Medical Second Opinion service, providing expert guidance on your diagnosis and treatment plan. For broader protection, you have the option to add coverage for five additional critical illnesses, including stroke, coronary artery bypass surgery, heart attack, paralysis, and coma.
Humania
Humania’s Cancer Insurance stands out for its flexibility and ease of access. It allows individuals from a wide age range, from 15 days old to 80 years old, to purchase coverage up to $75,000.
Additionally, it offers a 15% payout for minor cancers and guarantees your premium for 10 years, providing stability in your financial planning. For broader protection, you can add coverage for up to five other critical illnesses, including stroke, coronary artery bypass surgery, heart attack, paralysis, and coma.
While offering instant approval without medical exams, it’s important to note that you must purchase the policy through a licensed insurance advisor.
Canada Protection Plan
Canada Protection Plan’s Cancer Protect CI offers a straightforward and affordable option for cancer-specific coverage. It offers a term-75 plan with guaranteed premiums for the initial five years.
While the maximum coverage is capped at $50,000, it covers not only cancer but also aplastic anemia and benign brain tumour, offering protection beyond just traditional cancer diagnoses. For those seeking comprehensive critical illness coverage, the option exists to add Cardiac Protect, which extends protection to include five cardiovascular conditions, including heart attack and stroke.
Additionally, the plan boasts instant approval without requiring a medical exam and doesn’t have pre-existing condition exclusions like other insurers’ products.
Sun Life
Sun Life’s Express Critical Illness insurance comes in three plans: Basic, Enhanced, and Comfort.
The Basic Plan only covers cancer diagnoses and is limited to a $25,000 payment, with $50,000 available only if you get the Comfort Plan that covers seven illnesses: cancer, heart attack, stroke, coronary artery bypass surgery, aortic surgery, major organ transplant, and major organ failure on waiting list.
While all plans offer instant approval with easy online applications, their costs increase annually, potentially impacting affordability in the long run.
Comparing Cancer Insurance To Critical Illness Insurance Coverage
Unlike cancer insurance, which only covers cancer diagnoses, critical illness insurance offers broader coverage. It covers other critical illnesses like heart attack, stroke, or major organ failure.
Here’s a table breaking down the key differences:
Cancer insurance | Critical illness insurance | |
|---|---|---|
Scope of coverage | Specific types of cancer listed in the policy | 25 to 26 critical illnesses, including various cancers |
Payout | A tax-free lump sum payout upon diagnosis | A tax-free lump sum payout upon diagnosis |
Amount of coverage | Most policies limit the payout to $50,000 | You can get up to $2,500,000 in coverage |
Cost | Generally less expensive due to its narrower coverage | Typically comes at a higher premium due to broader protection |
Premium | Not guaranteed, can increase every year | Guaranteed not to change throughout the lifetime of the policy |
Lifetime coverage | No | Yes, it is an available plan type |
Ease of qualification | Easy, with only a few medical questions asked | Harder, with more comprehensive medical questions |
Medical exam | No | Possibly, depending on your age and benefit amount |
Optional benefits | None | You can buy return of premium riders to customize your policy |
Ultimately, the choice between these two options depends on individual needs and financial goals. People concerned primarily with the financial impact of cancer may find cancer insurance sufficient. However, those seeking broader protection for various severe illnesses might benefit more from a critical illness insurance policy, despite the higher cost.
Frequently Asked Questions
Which insurance is best for cancer?
Many insurers offer cancer insurance, but the best choice depends on your specific needs and budget. Consider coverage details and compare costs before deciding.
How does cancer insurance work?
Cancer insurance is a type of critical illness insurance that provides a tax-free lump sum upon diagnosis of specific cancers, helping manage out-of-pocket costs and lost income.
Will life insurance pay out for a cancer diagnosis?
If you die from cancer, your life insurance will pay a death benefit to your loved ones. However, life insurance doesn’t provide benefits to relieve your financial burden upon the diagnosis of cancer.
Making An Informed Decision About Cancer Insurance
In conclusion, cancer insurance presents a valuable tool for managing the financial burden associated with this disease. While it has its limitations, it offers unique benefits, including affordability, ease of access, and targeted protection. Understanding how it compares to critical illness insurance is crucial to making an informed decision that aligns with your individual needs and budget.
Ready to explore your options? Contact us today for a personalized consultation on cancer insurance. You can email us at info@briansoinsurance.com or call us at 604-928-1628. If you prefer, quickly get a quote using the form below to see how cancer insurance can offer you peace of mind.
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While we make every effort to keep our site updated, please be aware that timely information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Brian So Insurance and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser. This post is a brief summary for indicative purposes only. It does not include all terms, conditions, limitations, exclusions, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details which can be provided upon request. In case of any discrepancy, the language in the actual policy documents will prevail. A.M. Best financial strength ratings displayed are not a warranty of a company’s financial strength and ability to meet its obligations to policyholders.
