Critical illness insurance suffers from the same problem as life insurance: People don’t like talking about bad things that can happen. But often they don’t realize the value of these policies, which pay a lump-sum benefit at diagnosis of a covered condition.
Gary Webster, LUTCF, of Webster Insurance Services in Jacksonville, Fla., has worked with cancer plans for more than 20 years. “There are so many things that aren’t covered by health insurance,” he says. “Missed work time, travel expenses and experimental treatments are just a few of things that people have to deal with. These plans fill in the gaps.”
Webster, a member of Jacksonville AIFA, first met the Walkers in 1986; Annette and Billy had been referred to him for life insurance. Each year, he’d meet with them to go over their policy and inform them of any new options that had become available. In 1994, he offered them a family cancer policy with Protective Life.
“Missed work time, travel expenses and experimental treatments are just a few of things that people have to deal with. These plans fill in the gaps.”
— Gary Webster, LUTCF
“Annette was interested,” he recalls. “But she suggested that they should only insure Billy,” since he had a family history of cancer. Webster convinced them to take the family policy, however.
That February, Annette was diagnosed with colon cancer. “She was admitted to the hospital and had surgery; the doctors told her the cancer was removed,” Webster says. “In the meantime, I helped her file the claim forms, and the checks quickly started to come in. The money was paid to her directly to use as she needed.”
Several months went by, and the Walkers’ cancer policy rate increased. She was tempted to drop the coverage, but Webster again convinced her that she needed to keep it.
Sept. 11, 2001, was a date of personal tragedy for Annette that had nothing to do with the world events of that day. She got word that day that her cancer had come back, and it quickly became clear that it was not going to let her go. Again, her policy came through for her until her death in August 2003.
“Annette was able to stay in good spirits throughout this because she knew her cancer plan paid for the things Billy’s health insurance didn’t pay,” says Webster. “The benefits offset many other expenses that they would not otherwise been able to manage, such as food, lodging and transportation to surgeries, and their children’s education. They also made up for the time Billy lost when he missed work to be with her during her treatment.”
Twice, Webster had to “make the sale” in this case. The first time was convincing Annette to take the coverage. The second time was when she wanted to drop it. Her objections, he notes, were the same ones many advisors face when presenting critical care plans.
“They don’t think it will happen to them,” he says. “But you can ask them if they know someone—a relative, a neighbor, a co-worker, a friend—who has dealt with this disease. Everyone has someone in their life who’s had cancer.” He cites statistics that showed one in three people will face critical illness. “And supplemental plans pay the bills that health plans don’t,” he says. “Stress that.”
That experience with cancer isn’t always enough. Even Annette nearly walked away from her plan, even after she’d benefited from it. “People want to believe that they don’t need these plans, so you have to know what they do have,” says Webster. “Some group health plans have a maximum limit, for instance, and they need to understand the value of supplemental coverage.
“I’m not sure that people—agents and clients alike—understand the value of having a separate cancer plan,” he says. “But cancer is a very common disease. You have to cover all your bases, and the first time you have a claim that isn’t covered, it will be a learning experience for everyone.”