- 1.7 million Americans are expected to get a cancer diagnosis in 2018.1
- There’s a very good chance you will need to help a client plan for this difficult moment in their lives.
- A cancer diagnosis can be very expensive and derail financial security.
An estimated 1.7 million Americans are expected to get a cancer diagnosis in 2018, according to the American Cancer Society. Men have a 39.7% lifetime risk of developing cancer, whereas women carry a 37.6% risk.1 Given these statistics, it’s very likely your services will be needed to help guide clients financially through a cancer diagnosis.
While it may seem unrealistic or even thoughtless to expect a client who’s going through such a difficult time in their life to talk finances, it’s actually quite the opposite. Knowing where they stand financially may be empowering and helpful in planning their cancer battle. It can also be a huge stress reliever so they can concentrate on themselves and not their finances.
It’s not necessarily the end
First, the good news: A cancer diagnosis is not a death sentence like it was years ago. The anticancer treatments available today have yielded much better outcomes and prolonged survival compared to just a decade ago. According to the American Cancer Society, the five-year survival rate for all cancers combined has improved to 69%. So there’s actually a good chance your client will survive. Patients harboring a more treatable cancer may sense they are dealing with a temporary setback, whereas those with a more advanced diagnosis may require a different timeline.
The cost of cancer
Now the bad news: A cancer diagnosis can be expensive. Most private insurance plans are required to limit annual patient out-of-pocket spending, but that limit only applies to covered benefits. In 2018, the limit is $7,350 for an individual plan and $14,700 for a family plan. 2
Even with insurance and various “ceilings,” cancer patients often face unpredictable or unmanageable costs, including high coinsurance, high deductibles, having to seek out-of-network care, and needing a treatment that is not covered by their plan. Many also discover there are extra, hidden outlays, such as travel expenses if they choose to receive care in a different region of the country.
Your client’s insurance won’t cover everything, nor will Medicare. It’s likely they will be responsible for a significant share of the total costs of their treatment. They may need to borrow from their savings, retirement accounts, home equity, or even the cash value of their life insurance. For some, the additional costs may stop them from following or completing their cancer treatment plan. This can put their health at risk and may lead to even higher costs in the future.
After a serious diagnosis, some clients may panic and want to make hasty decisions that could impact their long-term financial stability. As a financial professional, your guidance can be the voice of reason and a source of comfort in one of the most difficult moments of their lives. Your guidance can be the difference between a client just surviving cancer and the ability to have a life afterward.
Starting the conversation
Regardless of whether the circumstances are good or grim, decisions need to be made. But, talking to a client who’s just been diagnosed with cancer can be a delicate balancing act. What you say and how you say it can make all the difference in how your intentions are perceived. As always, listening to what they have to say is your first job. Then, follow their lead and see where the conversation goes. If they are willing to share details about their diagnosis such as the type and stage of their cancer, it can help immensely with the planning conversation. Here are some other general tips from the Cancer Treatment Centers of America on how to talk to someone with cancer.
Start with a simple inventory of assets and income. Consider salary, commissions, bonuses, Social Security, pensions, annuities, and similar benefits. You’re looking for sources that may be able to help pay for treatment and care. There’s also a chance your client may be unable to work during treatment. Some other basic questions to ask include:
- Do they have life insurance with cash value, coverage for chronic medical conditions, or special riders?
- Do they have accrued sick time with their employer?
- What are their monthly expenses?
- Do they have an HSA? If so, what is the balance?
- Does their current health insurance plan provide additional coverage for cancer care?
- Do they have disability insurance? If so, how long are they covered?
- Do they own their home, how is it titled, and what is the value of it?
- Who would they want handling their financial affairs should they become unable to manage them?
- Have they executed a durable power of attorney for financial matters?
- Who do they want to make medical decisions for them should they become unable to express themselves?
- Do they have an Advanced Care Directive or a living will?
- Does someone they trust know where all their important documents are?
As you organize information about their assets, you may discover multiple accounts managed by different financial institutions. This can be a good time to mention consolidating their assets to simplify access and streamline the management of their funds. Also, many cancer treatment centers have professionals who are familiar with payment options, eligibility criteria, and lesser-known pathways that can also help lower costs.
Personal intentions and legacy
Even if a client’s prognosis for recovery is optimistic, this is a good time to ensure you understand all of their personal intentions and wishes. If they want to be sure they leave an inheritance to loved ones, borrowing against life insurance to pay for treatment may leave less than they’d hoped for should that treatment be unsuccessful. Double check that all beneficiary information and estate planning documents are accurate and up-to-date. If they own a business, succession planning should be discussed. You may even want to suggest a consultation with a trusted attorney to be sure all of your client’s personal intentions are accounted for.
Be a stress reliever
In any cancer diagnosis, everyone hopes for a cure or a lengthy remission. And the fact that cancer death rates have dropped 26% since 1991 should be encouraging to most.1 Being proactive, responsive, and sensitive to a client’s needs at this difficult time can help in building a long lasting relationship. You’re not a doctor, but you can help clients reduce the stress of a cancer diagnosis with careful and thoughtful planning. And that can play a big role in helping them on the road to recovery.
Things to Consider:
- Try to provide financial peace to the best extent possible.
- Check beneficiaries are up-to-date on life insurance and retirement plans.
- Don’t forget to pay attention to tax implications of whatever strategies you employ to help them pay for treatment and care.
- If necessary, connect your clients with an attorney to ensure all of their intentions are accounted for.
Transamerica’s Wealth + Health professionals have developed a valuable companion guide that can help your clients get organized and prepared for the financial and medical challenges that lay ahead. Download our “Field Guide to Life After a Cancer Diagnosis” to share with your clients and their families to help them better understand their options and make more informed decisions.
1 American Cancer Society. Cancer Facts & Figures, 2018.
2 US Department of Health and Human Services
Neither Transamerica nor its agents or representatives may provide medical, tax, investment, or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as, medical, insurance, securities, tax, legal, or financial advice or guidance. Please consult your personal independent advisors for answers to your specific questions.