Aflac – I quacked!
October 29, 2010 2 Comments
This week I signed up for Aflac insurance.
For those of you who aren’t familiar with Aflac, this is insurance you can get that is paid directly to you in the case of an accident or medical condition.
So I signed up for two plans.
The first I signed up for was the Cancer Plan. The reason I signed up for this is because both my brother, my mother, and my grandfather all passed away from cancer at a young age (22, 42, and 51 respectively). The insurance works such that for each incident of “things” that happen to me I get paid money. Upon getting diagnosed I get $1,500. Immediately. My first cancer treatment, I get something like $3,000. Immediately. For each treatment of chemo or radiation, I get paid money (I think $300 per treatment). For surgeries related to the cancer, I get paid money.
The idea is that the money can be used for ANYTHING I want. Whether that is to pay normal living bills because I won’t be able to work or to pay for medical bills or even to get financial affairs in order if I wanted to. The money is for me to use at my discretion.
The average pay out (according to Aflac) for people diagnosed with cancer who have this plan is $36,000.
I’ll be paying $28/month pretax for it. In addition, I’ll get a $50 check for ANY preventative cancer screenings I do. So my yearly pap smear, I’ll get paid $50 for. Thus I’ll be paying $336 per year minus $50 for getting the pap smear, or $286/year. That means that if I get cancer in the next 125 years ($36,000/$286) this plan will have paid for itself. Considering my odds based on family history, this seems like a safe “bet” to me.
The other nice thing is that my premium can NEVER be raised (unless I change my plan), so I’ll be paying $28 FOREVER. Which in 10-20 years is going to be very inexpensive comparatively.
The second plan that I purchased through Aflac is their critical illness plan. This is a once yearly pay out plan. How it works is that if I’m diagnosed/have a critical illness (cancer, heart attack, renal failure, ect, ect) I’ll get a large sum payment. If I get diagnosed 12 months later with something else. Or a re-occurrence of the same original thing, I get a second payout. So for instance, I selected the $15,000 level which is ~$8/month. So if I get diagnosed with cancer, I’ll get paid immediately $15,000.
Also, for every year I have this insurance the amount goes up by $500. So after two years, I’d get paid $16,000. After 10 years I’d get $20,000. The OTHER nice thing is that I also get another $50 from this plan for preventative screenings. So that pap smear is now getting me a $100 check in the mail every year. Thus my total cost for this plan is $96/year – $50 for the screening. Or $46 total per year. With a minimum $15,000 payout. I would have to go 326 years ($15,000/$46) without a critical illness to not lose out on this plan.
Now, if you look at this number-wise how I’ve just presented it, it is easy to ask yourself: Then HOW does Aflac make money?
The answer is simple, not everyone dies of these diseases. They’re betting you die of something else before you can collect money on your insurance. They’re betting that you’ll cancel your plan before you need a pay out. But for me, I feel that since cancer is so prevalent in my family that these two plans will be a good thing to set myself up with since the amount of payout is much higher than the amount of money I’m investing into it.
All in all, I’m very happy with my decision to join Aflac, and I hope I don’t ever HAVE to make any claims because I’ve been diagnosed with cancer or some other critical illness. But I feel a peace of mind knowing that upon diagnosis and treatment I’ll have about $20,000 (at least) that I’ll immediately get to use to help me live during that tough time.
Also, I like that I’ll get paid for preventative screenings. Getting paid $100/year for getting my pap smear? That makes the annual exam seem FAR less burdensome!