Cancer can be a powerful motivator – just ask Greg Feste, who was diagnosed with cancer in December 2007.
Two months later, Feste launched his benefits brokerage, specializing in cancer insurance.
“At the time I had a supplemental cancer policy in addition to my major medical, so I learned first hand how these policies work,” says Greg Feste. “At the end of the day my treatment did not cost me a penny out of my pocket.”
Feste’s diagnosis: hairy cell leukemia, a rare form of blood cancer. His treatment was successful, and he has been in remission and cancer-free for two years. His brokerage, Austin, Texas-based Rezilient LLC, has thrived as well, mostly by putting cancer coverage first and foremost.
In the early days, Greg Feste recounts, he literally stood up to serve as an example of a cancer patient determined to beat the disease. “I did presentations while I was in chemo,” he recalls. “One time, I was out there doing a group presentation for our cancer products with my pump on. You know, I sold a lot of policies that day.”
Taking a diversified, portfolio-based approach helped too. Feste explains: “What I found was that most people who sell in the worksite hook up with one carrier and sell just that carrier’s product. Because of my background in finance, I realized there’s just no way one company can have all the best products in every market. It’s just impossible. So we went out there and found the best product in each segment of the market. Then we put together a portfolio of the best offerings, starting with cancer insurance, disability, and so on, that gave the best benefit for the right price.”
In time, Rezilient added enrollment services, and now enrolls major medical coverage on behalf of referring brokers as well as their own voluntary products.
Cancer products 101
Today there are two types of cancer products on the market. One is a lump-sum policy where the insured buys a face amount and gets that amount as a lump-sum payment upon diagnosis, just as critical illness coverage provides. The other pays a smaller amount upon diagnosis and then pays benefits on an ongoing basis based on treatment protocols. These include benefits for facility confinement, anesthesia, and so on. And according to Lydia Jilek, Unum’s director of product development, “many cancer-only policies provide for a waiver of premium as well as a range of optional provisions such as a first occurrence benefit that pays a lump sum upon initial diagnosis of internal cancer.”
Unum’s policy also provides benefits for experimental procedures.
Jilek also notes two ways in which individual cancer-only policies offer additional flexibility. First, they are individually owned so employees can take their coverage with them when they leave; and second, most policies can cover an employee’s spouse and children as well. They also provide for a lower premium point than a critical illness policy, which would cover more conditions.
Unum is currently looking into developing a new group version of its voluntary cancer policy, according to Jilek, that would include both a lump-sum option and a schedule-based option. Their two-pronged intent: to refresh the product and create a new group product to sell.
At Rezilient, Greg Feste has chosen to sell “Cancer Plus,” Humana’s worksite benefit coverage, because it was one of the first indemnity/cash hybrid products. According to Feste, “you pick an amount up to $50,000 upon diagnosis, and it resets every year. So if you go through the first year, you get to reset the second year and get a second $50,000 benefit upon diagnosis of a different cancer.”
Flexibility in pricing is important too. For example, Aflac offers different products at different price points. “Research we have done over the years has shown us that when employees sit down to talk about these types of benefits, they like to have the ability to pick what’s right for them. So we’re very much into providing those options and choices,” says Karen Riedel, 2nd V.P. of product marketing at Aflac.
The last time Aflac’s cancer line was revised, an analysis of cancer treatment patterns led to an “aha” moment, according to Riedel. “Most cancer plans that pay for ongoing benefits pay for daily treatment, but we noticed that cancer is not treated daily anymore. For example, if you look at breast cancer, they might get treated once a month or every two weeks.” So Aflac switched to a system that pays less frequently but provides greater benefits. “Our current cancer plan provides up to 50% more in treatment benefits just by changing the way we pay them,” Riedel says.
And as part of a desire to stay on the cutting edge, Aflac now pays for vaccines when they come onto the market – specifically Gardasil for cervical cancer right now.
Why should brokers sell cancer insurance? For the best reason of all – because it’s a product that everybody needs. Says Greg Feste, “I don’t care how good your health insurance is, you’re going to get hit with major expenses. You don’t understand that until you sit in these oncology wards and you hear these stories of people who have mortgaged everything to pay their medical bills, or are facing bankruptcy or other financial difficulties.”
And while some markets tend to favor cancer insurance more than others – such as the health care industry, schools and government entities – it isn’t necessary to target sectors or types of employers. Any group that offers voluntary benefits should include a cancer policy in what it offers. As Feste points out, “everybody fears cancer. Everybody knows cancer treatment costs a lot. So unless you have a plan that’s 100%, it’s very rare that you can’t convince a benefit person to allow you to bring cancer [coverage] in for their employees.”
Once in the door, the first thing Rezilient does is look at the client’s core plan and make sure they understand it thoroughly, “because we need to match our voluntary products with how their core plan is set up,” says Feste. “Once we do that, we can see the holes in the plan, and know that somebody could be at risk if they do get cancer. So cancer becomes pretty much the first product. Then we coordinate with other products, like CI or heart attack and stroke, to cover other things that would be a concern. We also marry an accident policy to our cancer and heart and stroke coverage, because many of our clients have families, and this kind of arrangement protects the whole family. But cancer is our No. 1 product.”
By and large, Rezilient’s cancer products do about three times as well as the firm’s heart attack and stroke products, Greg Feste estimates.
Brokers also need to realize that it’s more than just a sale, Feste advises – it can really change someone’s life when you bring them a benefit check. “If someone’s making $40,000 a year and they have insurance – maybe it’s 80/20 – and they’ve got $45,000 in bills, it means they’re out of pocket for $9,000 off the top. Many people just don’t have it. So when you bring them a $10,000 check for their treatments, they think they’ve won the lottery. It’s rewarding.”
What people believe about cancer
Paying for treatment is among Americans’ top concerns about cancer. If they were to develop cancer, Americans would be most concerned about:
Quality of life: 75%
Being in pain: 72%
Paying for treatment: 69%
Dying from it: 68%
Leaving family in debt: 59%Being unable to work: 61%
Less than half of Americans believe their insurance plans would cover the full cost of treatment.
Only 41% of Americans believe they would be covered for care in a community cancer clinic, where 84% of cancer treatment actually occurs.
More than six out of 10 Americans could not afford $1,000 a month for cancer care, and more than eight out of 10 could not afford $2,500 a month.
Six out of 10 Americans say they would have to go on government assistance to pay the cost of cancer care.
Source: Community Oncology Alliance. Results of a representative phone survey of 1,022 Americans 18 years of age or older conducted in June 2009.