INSURANCE

MoneyShow personal finance expert Terry Savage knows the games and tricks of the insurance industry, but this is one coverage she swears by. Here's her reasoning.

What are the odds—and should you insure against them?

Buying insurance is a choice that is based on mathematics and emotion. For instance, we buy homeowners' insurance, despite relatively long odds against a fire. But the odds of dying are 100%—and yet one-third of adult Americans carry no life insurance at all!

What about cancer insurance? These policies are meant to be used in addition to or as a supplement to your regular medical insurance, helping insulate you from the devastating, uncovered costs of this dreaded disease and its treatment.

Seeing a lot of cancer around you? It’s not your imagination. According to the latest findings from the American Cancer Society, cancer will occur in 1 of every 3 Americans, and 3 of every 4 families. One in every eight women will be diagnosed with breast cancer in her lifetime.

The math experts will tell you cancer insurance is relatively expensive. But it can cost less than $1 a day—far less than playing the lottery, which is a much longer shot than getting cancer!

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A cancer insurance policy can give you money for the uncovered expenses of dealing with cancer.

The policy can pay out in the form of a lump sum paid to you or your family at the time you are diagnosed, or a daily additional benefit if you are receiving treatment. It can be paid as additional cash reimbursement for every surgery or anesthesia, or for getting a second surgical opinion.

There are so many variations on cancer insurance that it’s difficult to compare the policies. They are offered by major diversified insurers like Aflac, Mutual of Omaha, and Allstate—and companies such as Family Heritage, which specializes in this kind of insurance.

So that’s where you start looking—with companies that are rated at least B+ by at least one major rating company. And here’s what you want to compare:

  • Specific coverage: Make a list of what each policy covers and the amount of benefit it offers for each item. Create your own comparison list, including: Preventive screening, daily benefit for hospital or intensive care, drug and medical benefits in-hospital, chemo or radiation benefits per treatment, surgery benefit, anesthetic, hospice care, transportation to out-of-state treatment, blood and plasma benefit per occurrence, ambulance service, post—surgical physician benefit, X-ray and lab benefits, bone marrow transplant, prosthetic devices—and even coverage for experimental treatments.
  • Check carefully for lifetime benefit limits, as well as daily and monthly benefit limits.
  • Individual coverage: If your company offers this benefit, make sure it is portable if you leave your job.
  • Guaranteed renewable: The policy should be guaranteed renewable every year for life, with no age limit, and should have a level premium.
  • Refund of premium: Offered by some companies every 20 years, or at age 75, minus any claims paid.
  • Claim-paying reputation: Make sure the insurance company is known for prompt payment of claims, and has a US-based claims office (as opposed to an overseas telephone center).

No physical exam or blood work is required, although there is a 30-day waiting period for the policy to go into effect. And if you have had a previous cancer occurrence, there is likely to be a several-year waiting period.

Bryan Fisher, a top agent with Family Heritage, says: “ Having cancer insurance gives peace of mind that money can easily buy.” Full Disclosure: His pitch was so convincing, I bought a policy for myself.

In that spirit, I share this story with you. And that’s The Savage Truth.

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