With a 50% chance for men and 33% chance for women developing cancer, perhaps it’s time to discuss this exposure with your clients
Recent American Cancer Society (ACS) data show that, for nearly all types of cancer, survival rates are higher—some dramatically so—than they were in prior years. But despite progress, ACS models project that, this year, we’ll still see nearly 1.7 million new cancer cases diagnosed and more than 600,000 cancer deaths in the United States.
Those who are diagnosed have to not only fight the disease, but they also must be concerned about its financial impact. Wendy Herndon, second vice president, product development and implementation for Aflac, puts it like this: “They face not only the burden of being diagnosed with cancer, but also the costs associated with treatment.” For many, cancer insurance can help bridge that financial gap and remove at least part of the worry that follows learning they have the disease.
Men in the United States have a one in two chance of developing some form of cancer during their lifetimes, and a one in four chance of dying from it. American women, on the other hand, have a one in three chance of developing cancer within their lifetimes, and a one in five chance of dying from it.
According to John Stanley, Transamerica’s managing director, employee benefits, “The total cost of dealing with a cancer diagnosis is beyond what most working people are prepared to support, even with comprehensive major medical insurance.” He says cancer patients can experience, on average, approximately $5,400 of uncovered expenses.
“Just as it’s happening in the broader healthcare arena, we are having to deal with rising costs to treat cancer. We really aren’t seeing the one-size-treatment-pattern-fits-all anymore.”
Second Vice President, Product Developmentand Implementation
And that number’s not going down. “Advancements in care and increasing drug costs, coupled with the continued increases in major-medical deductibles and out-of-pocket expenses, all exacerbate the problem for consumers,” Stanley notes.
Herndon concurs. “Just as it’s happening in the broader healthcare arena,” she says, “we are having to deal with rising costs to treat cancer.” More expensive drugs is one big factor. Another, she says, is customization of treatment protocols. “We really aren’t seeing the one-size-treatment-pattern-fits-all anymore.”
Instead, she explains, “They are doing a lot of gene work—looking at the actual cellular makeup of the cancer cells and then customizing the treatment options from there. One of the biggest trends we’re seeing involves immunotherapy—treatments that help a patient’s immune system fight cancer. For a long time, chemotherapy with immunotherapy was a primary treatment; the immunotherapy was being used to help boost the chemotherapy’s effect.
“Recently, we’ve started to see the emergence of something they’re calling Immuno-Oncology, which is the use of immunotherapy drugs to actually target cancer cells and kill them,” Herndon adds. “That’s a really exciting treatment protocol we’re starting to see emerge in the market and, of course, new treatment protocols often come at a higher cost, which creates more of a burden for the cancer patient and their family.”
Changes are taking place in the insurance market, too. “Cancer insurance sales are seeing a moderate increase within the industry,” Stanley explains, “and the advent of critical illness products that include variations of cancer benefits has certainly impacted stand-alone cancer sales.”
Herndon is seeing changes, too. “We have been offering a cancer product since 1958,” she says. “It’s one of our flagship products, and it’s one that’s near and dear to our hearts. We look at trends and treatment advances, and then review our product every two to three years to update benefits to be in line with treatment protocols.”
Older policies, she notes, paid a chemotherapy benefit daily. “As treatment protocols changed, we changed those to weekly, and we added benefits for chemotherapy patients who can self-administer with a pump, as well as oral chemotherapy.”
Wellness is playing an increasingly important role. “Cancer plans were among the first supplemental health plans with an incentive for routine wellness checkups,” explains David Horah, senior worksite employee benefits representative at Sun Life Financial. “Some carriers have integrated their cancer insurance wellness benefits with their broader wellness plan, so the benefit is triggered automatically, rather than by manual notification that the insured had a wellness screening.”
Stanley says his firm is “challenging conventional thinking on what consumers see as value in a cancer benefit. Our goal is to make the benefit both easy to understand and easy to use.” The company has embarked on a product development process that includes focus groups with consumers, healthcare delivery personnel, and brokers who specialize in offering these programs to employers.
Advice for agents
Horah says agents and brokers need to encourage employers to offer cancer insurance for one simple reason: “because cancer is a major concern for employees.” Agents should be transparent with employers, he adds. “Present them the various options, and then let them make the decision on what will be offered to their employees. Show the employer how the options can help cover gaps in their medical plan.”
Herndon agrees. “More and more, cancer insurance is part of the overall voluntary benefit offering,” she says. “That’s really the message for the employers who are looking to take care of their employees. Our Aflac WorkForces Report shows that employees who have access to voluntary benefits are more satisfied with their benefit offering—and their employer—than those who don’t have access to it.”
“The total cost of dealing with a cancer diagnosis is beyond what most working people are prepared to support, even with comprehensive major medical insurance.”
Managing Director, Employee Benefits
According to Horah, while cancer affects every socioeconomic level, “the impact to middle-class earners and low-wage earners can be devastating, compared to a higher-wage earner. Even though an employer may not see the need personally, they need to be convinced that their employees’ exposure to impact is much higher than theirs.”
“As an employer, whether it’s a small business or large business, you want to be able to protect your employees and help them cover their unexpected out-of-pocket expenses,” Herndon adds, “so when they’re at work, they’re able to focus on work, and they won’t have to be worried about the financial stress that was brought on by a diagnosis or an illness.”
Employers aren’t the only target audience. “Cancer insurance is something that nearly every consumer in the market should consider,” Herndon notes. “Looking back to our WorkForces Report, 65% of employees have less than a thousand dollars to pay for an unexpected medical expense. Consider-ing how expensive treatments can be, cancer insurance is really something that could help keep consumers financially afloat.”
Horah concurs. “Many buyers live from pay period to pay period, and often they have not set aside money to cover emergency financial needs,” he explains. “These individuals are likely to look at cancer insurance as a way to help them survive in the case of a diagnosed cancer.
“Many times, they’ve seen the financial impact of cancer on a friend or family member, and they may even have seen a cancer plan provide money to help the individual make it through treatment,” Horah adds.
Leverage such information as part of the sale. “It’s important to remember to customize the sale or message,” Herndon suggests. “Nearly everyone has someone who’s been impacted or affected by cancer. It’s important to find out specific needs and build the sale around that.
“It’s not a cookie-cutter sale,” she adds. “You’re not dealing with a one-size-fits-all product. You have the lump-sum product, which, as the name implies, usually pays a set amount upon diagnosis, and is usually offered in denominations from $10,000 to $50,000, sometimes more, depending on the level of underwriting.”
Other products offer a smaller lump sum upfront. “And then they can receive benefits throughout the treatment process,” Herndon says. “It’s really important for agents to take time to understand, with their customers, which product design best fits. Also, it’s important to keep the things simple, so customers grasp the policy benefits.”
She also encourages agents to look beyond the worksite for sales opportunities. “Reaching today’s workforce may require getting out of the employer space and going direct to the consumer,” she says. “With the gig economy, you’re seeing an increase in 1099 workers who may not have opportunities for payroll deduction.”
According to Horah, enrollment is making a difference on how these products are being offered. “Many carriers are now supplying enrollment support with salaried benefit counselors,” he notes.
Stanley believes that brokers and consultants should spend time learning more about current market conditions and available products. “Company reps, including our Transamerica regional sales teams, will spend time educating producers and their account executive teams on the benefits and how they can complement major medical plan design strategies.”
In addition, he says, “Taking time to understand the firm’s block of business—something we define as a block review—can allow for a focused and targeted strategy.”
Herndon says carriers are working to address trends. “One of the most important things for us is to continue watching market trends and making sure our policies evolve with them,” she says, noting that cancer is not only one of the company’s flagship products, it’s also a big part of the firm’s philanthropy, played out through the Aflac Cancer Center at Children’s Healthcare of Atlanta.”
Stanley concludes: “Cancer is an illness that impacts medical trends, absenteeism, and employee morale. There are ways to positively impact these issues, and the rise of supplemental health benefit programs will continue to drive innovation.”
By Dave Willis, CPIA
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