Would it surprise you to learn that more than half of all U.S. workers don’t know what type of coverage their group health insurance provides for serious illnesses?

It shouldn’t. Insurance agents and employers often say that many employees don’t realize what their group health insurance covers until they actually experience a serious illness, such as a heart attack or cancer. Recent Harris Interactive surveys illustrate just how true this is.

51 percent of employees surveyed say they don’t have a clear understanding of what their health insurance covers for cancer-related treatment. When asked if their health insurance would cover most expenses if they or a family member were diagnosed with cancer, 40 percent say they don’t know.

84 percent of employees surveyed say they’re concerned that they or someone in their family will be diagnosed with cancer, heart disease, or another serious illness in the future. As a result, 71 percent of employees are interested in buying personal insurance products at work to help cover expenses for cancer or other serious illnesses that their health insurance may not pay for.

People with serious illnesses today may survive longer because of advances in medical technology and prevention. On the flip side, however, these same people usually have longer recovery times and more expensive treatment. Imagine the strain on a family’s budget if the primary wage earner can’t work while recovering from a heart attack or undergoing chemotherapy and radiation therapy. In addition to out-of-pocket medical expenses, the bills for the house payment, electricity, and groceries keep coming in.

Even if your clients offer comprehensive health insurance to their employees, their plan may not cover all the medical expenses. It also probably won’t cover nonmedical expenses, such as lost income, mortgage payments, rehabilitation, home health care, child care, and travel expenses to and from treatment centers. An employee who has a heart attack or stroke, for example, can face very expensive treatment that leads to bills that health insurance doesn’t cover. They may also want the choice of going out-of-network for treatment.

A cancer or critical illness plan can provide benefits to help pay for all types of medical expenses not covered by health insurance, such as deductibles and co-insurance. They can also help pay for nonmedical expenses.

Consider packaging a cancer or critical illness plan with short-term disability or life insurance to help provide additional benefits during a serious illness. Short-term disability and cancer or critical illness insurance, for example, can provide additional benefits if the insured can’t work, protection during the disability elimination period, and coverage for additional expenses not completely covered by disability benefits. Life insurance bundled with cancer or critical illness insurance can offer coverage for illnesses that the insured survives, as well as protection for the insured’s home by providing additional benefits to use to help pay the mortgage.

How do employees decide which plan best suits their needs? It depends on the employee. Do they have a family history of heart disease, strokes, or cancer? If so, cancer and critical illness plans can be good solutions. With younger employees, you may want to offer critical illness. It’s relatively inexpensive and covers a wider range of illnesses, including cancer. Older employees may want to purchase critical illness without the cancer coverage and pair it with a standalone cancer plan for more comprehensive cancer coverage.

More and more brokers are becoming interested in adding group and individual critical illness and cancer plans to their agency’s portfolio. Why? Because their clients want stronger and more competitive benefits programs. These plans help clients provide choices to meet the individual coverage needs of their diverse workforce.

Les Miller is a managing general agent for central Texas for Colonial Life & Accident Insurance Company. He can be reached at 325-670-0810 or les.miller@coloniallife.com.

What to Look For

Critical illness
Most critical illness plans provide a lump-sum benefit ranging from $5,000 to $50,000 or more when an insured is diagnosed with a covered critical illness. Covered illnesses under a critical illness plan generally consist of:

  • Heart attack
  • Stroke
  • Major organ transplant
  • Kidney failure
  • Cancer
  • Carcinoma in situ
  • Coronary artery bypass surgery

Cancer
Cancer plans can provide lump-sum benefits for:

  • Cancer screening tests/wellness benefit
  • Inpatient treatment
  • Treatment
  • Transportation and lodging
  • Surgery
  • Extended care