When we hear the word “cancer” or some other name of a deadly disease our thoughts often may go to “Thank God it’s not me, the expense would ruin my family.”
You needn’t feel like an ogre for thinking this way – all of us do. But, unethical insurance sales people prey upon folks who fear they will outlast their health insurance with a chronic, expensive and terminal disease. Don’t fall for it!
While an insurance salesperson will try to make it sound like a health insurance policy to you, it isn’t. You are betting that you will get cancer or some other horrible disease in a named dread disease policy. They usually pay a lump sum when you are diagnosed and do not pay health care providers anything.
If you need insurance for your family after you pass away then buy life insurance or hire a great estate planner. If you choose cancer as your dread disease and develop heart disease and die from a heart attack you do not collect a single penny! If you try to insure yourself against all the dread diseases there are you most likely will be “premium poor” in just a short time.
According to the federal government one state has already banned the sale of these policies since they are more scam than insurance.
Under the recently passed and soon to be completely implemented Affordable Care Act there will no longer be a cap on how much your health care insurance carrier will pay on your behalf. If you are diagnosed with a chronic illness your policy cannot be cancelled nor your condition excluded from coverage. If you do not have health insurance, purchasing a good comprehensive policy to meet your needs will provide you with coverage despite any illness you may develop. Even accidents are covered by a comprehensive medical policy.
This answers the question: Are accident policies worth the money they cost? Nope, it is the same bad bet as a dread disease policy.
Both dread disease insurance and accident insurance are bad deals for consumers. If you already have health insurance you are set. If you do not, and cost is a concern, then purchase a comprehensive high deductible insurance policy. This type of policy will kick in after you have been charged a predetermined amount during the policy year – usually between $1,500 to $5,000.