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Protect Yourself: Specialized Insurance and Other Protections

Obviously, the main insurance mechanism for protecting yourself against dietary risks is a good health plan. We will consider the mechanics of that later in this book. For now, we'll take a look at some of the specialized forms of insurance that protect against cancer and particular health risks.

In the heated debate between managed care and traditional indemnity insurance, some of these smaller but equally important health coverage issues are lost. These smaller issues are often related to specialty health insurance policies -- matters that are not broad enough to become political debates...but which can be devastating when they impact an individual person or family.

If insurance companies consider you uninsurable due to your health or medical history, or if you are in the market for more than just your typical medical and hospitalization coverage, you might want to explore the options of other, less commonly used forms of health-related benefits or policies -- on a stand-alone basis or combined with each other -- including some of the following:

  • health insurance that covers specific diseases,
  • dental coverage,
  • vision coverage,
  • a separate prescription plan, or
  • even long-term care coverage.

Of course, people look for these kinds of coverage precisely because they suspect they will have a particular kind of need. On the other hand, some people choose these coverages for financial reasons (i.e., their employers offer the insurance for free...or for a discounted fee via a tax-advantaged cafeteria plan).

Whatever the reason people choose specialty coverages, the plans will likely grow in importance as technology and financial sophistication advance.

Some risk experts predict that soon health insurance will be a collection of specialty coverages for specific conditions. This would allow maximum flexibility for the policyholder -- and maximum precision for the insurance company.

In the meantime, specialty coverages remain...a specialty. But one that's worth considering in detail.

Cancer insurance is sometimes referred to as a limited risk policy or the even older name dread disease policy, reflecting the basic truth of the coverage: It only provides benefits for a single category of health risks -- cancer.

Cancer insurance provides a daily benefit (such as $50, $75, $100, etc.) if you or a family member is hospitalized for cancer or is receiving regular cancer treatment on an inpatient or outpatient basis.

However, a specific insurance company or particular policy may limit coverage even more, providing daily benefits only for inpatient treatment of cancer with outpatient expenses excluded.

If you have a cancer policy and are hospitalized for cancer-related treatment or surgery, over and above any other benefits, the policy will indemnify you at a specified amount ($100 per day is common) for as long as the treatment or hospital confinement continues.

Of course, if you're hospitalized due to a broken leg, the cancer policy will pay nothing.

A basic medical expense policy or major medical plan will cover cancer like any other illness would be covered -- on an expense-incurred basis. The cancer policy covers you on a daily basis without regard to expenses incurred.

However, cancer policies usually contain limitations in terms of the daily benefit, a policy maximum or a time limitation. For example, a plan may pay $100 per day for up to 30 days of confinement, 90 days of treatment, etc.

In most cases, cancer insurance makes sense for people who can't qualify for standard health coverage because of other problems they've had. In other words, a person with a history of heart disease may choose cancer insurance because it's the only coverage she can get.

If you already have hospitalization insurance do you need an additional policy for cancer insurance? The answer depends upon your ability to pay extra premium, awareness of the risk of cancer, etc.

Because cancer is one of the leading causes of death, most people are aware of its risks and costs. However, this awareness may not create any urgency for "extra protection" by means of a cancer policy.

For example, almost everyone is aware of the relationship between smoking and lung cancer; yet, many continue to smoke because they don't care or don't believe the cancer will happen to them. Or, even more unfortunately, they simply can't quit. Can smokers buy cancer insurance? Probably not. Before they issue a policy, most insurance companies that write cancer coverage will ask you if you smoke. If you answer "yes," the premiums are very high.

In most other cases, the premiums for cancer insurance are relatively low -- just a few dollars in annual premium per thousand dollars of coverage for a healthy person in his or her thirties.

So, why don't more people buy the insurance? Several reasons stand out:

1) many people don't see a reason to buy extra coverage when they already have regular health insurance.

2) most consumers don't like to think about their health in terms of contracting specific, deadly diseases.

3) most insurance companies would rather focus on broad coverages sold to large audiences...so they don't encourage their agents to sell specialty policies.

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