Cancer covers offer higher sum assured than regular health insurance policies, along with stage-based payouts
Reports estimate about 10 lakh people fall prey to cancer every year in India. According to an Indian Council For Medical Research report, the number of cancer patients is expected to rise from 14 lakh in 2016 to over 17.3 lakh by 2020. With the rise in the number of cancer cases, the cost for the treatment is also on the rise. The fact that the cost for this treatment can go up to Rs 20 lakh, or even more, makes it crucial to have an insurance cover.
Since the amount of coverage provided by a regular health insurance policy is likely to be inadequate, one should opt to buy a standalone policy that covers all types of cancers. Sameer Kaul, Sr. Consultant, Surgical & Clinical Oncology, Apollo Cancer Institute, says, “There is no competition in this market because there are not enough products.”
Stand-alone cancer covers are fixed benefit plans that offer lumpsum payouts at different stages. The policy term can range from 5 to 70 years. Experts believe as we have an aging population and cancers such as that of prostate and colon are quite common after the age of 60-65.
The sum assured for these policies starts at Rs 2 lakh and goes up to Rs 50 lakh. However, as these are pure protection plans, they do not offer any benefit in case the policyholder survives the policy term.
What does it cover?
Cancer-specific policies cover various treatments, from diagnosis to hospitalization, including chemotherapy, radiation therapy, and surgery. The payment is usually made at different stages of diagnosis – minor, major and critical. The three stages of cancer that are covered include Carcinoma in Situ (CIS) or formation of a tumor, minor stage, and major or critical stage.
The payout happens depending on the stage in which the person is diagnosed. Around 20-25 per cent of the sum assured is paid out if the policyholder is diagnosed at an early or minor stage. However, the exact percentage varies from one insurer to another. (Refer the table for premium)
|Insurer||Plan Name||Premium (35 years)||Premium (45 years)|
|ICICI Prudential||Cancer Protect||5,583||9,668|
|Future Generali||Cancer Protect- Option 2||6,832||15,465|
|Max Life Insurance||Cancer Insurance||10,431||18,809|
|HDFC Life||Cancer Care- Platinum||5,152||15,587|
If partial payment has been made by the insurer at an early stage, it is then deducted from the payment at the major stage. For instance, in HDFC’s Cancer Care plan, 25 per cent payment is made at the minor stage, and the rest of the premium is waived off for three years. The remaining 75 per cent is paid at the major stage and the policy terminates. If the disease is diagnosed at a major/second stage, the plan pays 100 per cent sum assured, minus all previously-paid claims. Once a major stage claim is approved, all future premium payments are waived for the remaining policy term.
Insurance companies inquire about pre-existing diseases while underwriting health policies. One of the important exclusions includes pre-existing cancer which is not covered by these policies. Other cancers such as skin cancer and cancer caused by sexually transmitted diseases are also not covered. According to experts, people buying these policies should read the policy text carefully, as the exclusions in these type of policies are important.
Who should opt for it?
Cancer plans are supplementary plans and should not be confused with a health insurance plan. Instead, these plans should be bought in addition to the basic health insurance coverage. A cancer insurance plan provides a lump-sum benefit, usually, a percentage of sum assured, unlike a health insurance policy, which reimburses the actual expenses. Based on family history, if there is even an average risk of developing cancer, one should opt for a standalone cancer product. However, experts suggest, having just a standalone cancer product is not a good option; cancer insurance plans are no replacement for health insurance policies.
The premium for this cover is calculated based on the sum assured, policyholder’s gender and age, the term of the policy, existing health issues, and family history. A big benefit of a cancer policy is that future premiums are waived on the diagnosis of the disease.
One can also claim tax benefit under Section 80D on the premium paid.