Protection  

Employers urged to consider lump-sum plans for cancer

The six-page White Paper on Cancer from national consultancy firm Jelf Employee Benefits, said employers could use medical expenses plans to specifically cover cancer.

These plans can provide a lump sum directly to the employee, giving them more freedom in how they choose to be treated, or they could use critical illness cover to finance care.

According to the paper, these options may be better for staff and more cost-effective for employers, given that one in three people are being diagnosed with cancer.

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The paper found that costs can be astronomical – for example, one big cancer claim can have a significant effect on the cost of PMI premiums – and employers don’t always understand alternative options.

The paper also claimed the NHS was suffering “shortfalls” in terms of the provision and availability of cancer treatment.

The paper said: “Almost two-thirds of cancer treatments presented to the National Institute for Health and Care Excellence are not authorised.”

Iain Laws, director of UK healthcare for Jelf Employee Benefits, said: “There are many more ways to insure the eventuality of cancer and we’re encouraging employers to look specifically at how to manage this.

“If employers do choose a traditional PMI scheme we want them to have made an informed decision to have done so.”

The paper added: “While these insurers have taken a belt-and-braces approach, others have focused on the needs of employers, who would like a less open-ended and potentially more cost-effective approach to covering cancer.”

It cited Simplyhealth, which pays for recognised treatments and licensed drugs that aim to cure cancer or induce a remission. It also covers any necessary treatment for 12 months once a patient reaches remission, their cancer is stable or they need palliative care.

The paper said: “Taking this more limited approach, SimplyHealth argues, will protect employers from the potential price rises associated with unlimited private medical insurance cover.”

IFA VERDICT

Kusal Ariyawansa, chartered and certified financial planner at Appleton Gerrard Private Wealth Management in Manchester, said: “Yes, it is a more cost-effective way of providing a lump sum, but let’s not forget that we must take responsibility and protect our own finances, meaning a personal income protection policy as well as a death or earlier critical illness plan are must-haves.”

Key Facts:

250,000 people are diagnosed with cancer in England every year

130,000 people die in England every year as a result of cancer

£30,000 - the average cost of treating someone with cancer in 2010

£5bn - the annual cost of NHS cancer services

£18.3bn - the annual cost of cancer to society

63 per cent of all new cancer cases are in people aged 65 plus

At age 45-49, the cancer incidence rates are 195.4 and 384.2 per 100,000 population for men and women respectively. At age 65-69 these have increased to 1775.3 and 1260.8 respectively