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Answers to frequently asked cancer insurance questions

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What is First Diagnosis Cancer insurance — and other lump sum cancer insurance questions answered

“You have cancer.”

Those are three words no human wants to hear. But if they do, the impacts to physical and psychological health are substantial. Soon after, the impact to their financial health is sizable too.

About four in 10 Americans receive a cancer diagnosis during their lifetimes, according to the latest data from the American Cancer Society, and it estimates 1.9 million new cancer cases will occur in the United States in 2022 alone. Out-of-pocket costs were $16.22 billion for cancer patients in 2019. U.S. cancer patients with Medicare coverage aged 65+ face the highest out-of-pocket costs within the first 12 months following diagnosis — an average of $2,200.

First Diagnosis Cancer insurance may be a solution that makes a real difference. It can help cover the costs of chemotherapy, surgeries, experimental treatments, copays, and more. This lump sum cancer insurance is designed to help cancer patients and their families steer clear of major financial hardships as the result of cancer treatment. But many people aren’t familiar with this supplemental health insurance, and they typically ask the following questions.

How much does cancer treatment cost without insurance?

In general, direct medical costs for cancer can be broken down to three main categories:

  1. Hospital outpatient or doctor office visits
  2. Inpatient hospital stays
  3. Prescription drugs

The total cost varies based on the type of cancer, what stage the cancer is in, and the treatment protocol. The average cost of medical care and drugs tops $42,000 in the year following a cancer diagnosis. But keep in mind, 60% of total expenses are considered indirect costs, which are difficult to estimate.

What is First Diagnosis Cancer insurance?

First Diagnosis Cancer insurance is designed to help cover direct and indirect costs of cancer treatment. It is an optional plan that fits with other insurance when retirement planning that you’d enroll in prior to diagnosis.

Wellabe’s cancer policy provides a lump sum payment upon initial diagnosis of all internal cancers, as well as malignant melanoma.1 No treatment needs to be received in order to get the benefit, unlike other products, which act as a reimbursement or payment to a provider once services are received.

Lump sum cancer insurance can be helpful in the event of experimental treatments, and it covers both in-hospital cancer care and outpatient treatment. When you enroll, you choose the benefit amount and what you will be paid if a diagnosis occurs. For example, Wellabe’s plan allows you to choose increments of $5,000 from $10,000 to $25,000.2

What does the best cancer insurance cover?

Treatments, including immunotherapy, are usually covered by your regular health insurance plan, but the best cancer insurance policies can be used to help cover deductibles and coinsurance or be used for household expenses or care for loved ones while the patient is receiving treatment.

For example, our First Diagnosis Cancer insurance pays you a lump cash benefit, and you choose when and where to spend it. You may use it for:

Direct costs

  • Surgery
  • Chemotherapy
  • Radiation

Indirect costs

  • Deductibles and copays
  • Experimental medicine and treatments
  • Lost income due to working less
  • Mortgage or rent, utilities, groceries, and home goods
  • Travel, meals, gas, parking fees, and lodging during treatment
  • Caregiving or home care

Who is eligible for supplemental cancer insurance?

Cancer insurance is designed to be supplemental insurance — that means it doesn’t replace regular health insurance or Medicare but provides additional coverage. First Diagnosis Cancer insurance can help anyone 18-79 years old, but you may especially want to consider getting coverage if you:

  • Have a family history of cancer
  • Are the sole wage earner of the family
  • May not have enough savings to cover expenses
  • Have health insurance that doesn’t cover all cancer-related expenses or treatments
  • Strive to protect family assets

But if you have received a cancer diagnosis already within the last 10 years, you do not qualify for this lump sum cancer insurance.

How are taxes impacted by supplemental cancer insurance?

The cash benefit of cancer insurance is paid tax-free. Typically, cancer insurance cannot be deducted from your taxes, but contact your accountant, tax adviser, or a financial consultant for guidance related to your specific circumstances.

Next steps

For more information on our products and what is available in your state:

Photo credit: iStock

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Supplemental health plans

Understanding your insurance options in retirement

Kelly Rayburn, AVP national sales and distribution at Wellabe, and Olga Villaverde, from Lifetime TV’s The Balancing Act, discuss the areas that primary health plans and Medicare may not cover and how you can protect yourself with supplemental plans.

Learn more about supplemental health plans

More topics at thebalancingact.com

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