5 things to focus before buying a Cancer Insurance Plan

While buying a cancer specific insurance plan it is important to take the sum insured in sync with the treatment expense. The cancer insurance plan will act just like a superficial form of financial back up if, it would not be able to meet the overall treatment cost.

Jun 30, 2017 04:06 IST others Harjot Singh Narula, Founder & CEO, ComparePolicy |

Cancer is an unfortunate disease which could surround anybody without a knock at the door. Cancer not only deteriorates the physical health, but also impacts the financial health of the patient as getting it treated is an expensive proposition.
 
If we look at the cancer related statistics as per the Indian Council of Medical Research (ICMR):
  • The total number of cancer cases has been around 14.5 lakh for the last year and the figure is likely to increase and reach 17.3 lakh by the year 2020
  • Only 12.5 % of patients come for treatment in early stages of the disease
  • Breast cancer is the most common type of cancer among females and mouth cancer topped the list among males
  • An estimated 71% of all cancer related deaths are occurring in the age group between 30 to 69 years
  • 70-90% of all cancers are due to environmental factors
 
There are standalone cancer insurance plans which are offered by insurance companies in the market. Cancer insurance plans offer lump sum payout in case; the insured is being diagnosed with cancer (as per the policy terms and conditions).
 
Why Cancer Insurance Plan?
Now, many of us assume that our regular health insurance plan will cater to the expenses for terminal illness like cancer. The cost of treating cancer may range from Rs 2 lakh to Rs 20 lakh approximately in six months’ time frame depending upon the stage of diagnosis. Also, people diagnosed with cancer may not be able to continue with their routine income earning job which may result in loss of regular income.

The lump sum or partial payout as claim amount from the cancer insurance plan can be used towards paying the treatment expenses, lengthy hospital stays, and consultation expenses for a specialist visit. It could also be used to tackle non-medical expenses like managing travel expenses for treatment to far away places, household expenses, etc.
 
In case you are the sole earning member of the family, or possess some family history of cancer, you must think about this kind of insurance. The cancer plan also safeguards your assets and savings that may get eroded during the treatment phase.
 
5 Important points to consider before buying Cancer Insurance Plan:
But does that mean you should buy any cancer plan coming your way? It is important to understand the framework of the cancer insurance plan and keep in mind these important five things before making a final buy.
 
Buy a robust Sum Insured
The growing inflation in the healthcare sector is alarming. Especially, when it comes to an astronomical cost of treating a terminal disease like cancer. The treatment of cancer, depending upon its stage of diagnosis can cost a gigantic monetary figure. Also, if you have a family history of cancer, it enhances your susceptibility more towards that specific type of cancer.
 
So, while buying a cancer specific insurance plan it is important to take the sum insured in sync with the treatment expense. The cancer insurance plan will act just like a superficial form of financial back up if, it would not be able to meet the overall treatment cost. Hence, it becomes imperative to buy an adequate amount as the sum insured under the policy to combat the financial impact of this unfortunate disease.

Cancer Insurance Plans like Max Life Cancer Insurance Plan, Future Generali Cancer Protect Plan, Aegon i Cancer Insurance Plan offers a maximum sum insured up to Rs 50 Lakhs (subject to underwriting).
 
Some cancer insurance plans also offer indexation benefit where the sum insured increases by a fixed percent every year subject to a maximum limit. This inbuilt benefit will help the policyholder to build a cover to face the growing inflation. The indexation feature will certainly attract more premium in an insurance policy but will also ensure that you build upon an adequate sum insured in the event of a claim.
 
Under Max Life Cancer Insurance Plan, sum insured increases by 10% (as simple rate) for every claim free year up to a maximum of 150% of base sum insured.
 
Under HDFC Cancer Care Insurance Plan, the sum insured increases by 10% of the initial sum insured each year starting from the first policy anniversary. Indexation benefit will continue till the sum insured becomes 200% of the initial sum insured or the occurrence of any claim.
 
Coverage of all stages of Cancer
Diagnose of cancer is segregated into 3 stages which are Carcinoma In Situ (CIS) - Pre cancer stage, Early stage, Major stage or Critical stage depending upon the severity. It is important to opt a plan which offers stage based payout to confront the treatment and other allied expenses with ease at various stages. It is important to analyze the stage based claim payout under different stages of cancer and the overall total benefit under the plan.
  • Usually, the cancer insurance plans offer a percentage of the sum insured (ranging between 20-25%), which is payable if cancer is being diagnosed at an early stage. 100% of the sum insured (less previously paid claim amount, if any) at the major/critical stage of cancer.
  • Aegon i cancer insurance plan offers 150% of the sum insured (minus any previously paid claims under the policy, if any) as a benefit which can be claimed under a critical stage of cancer during the policy term.
  • Also, it is important to check that the cancer insurance plan covers all types of cancer. There are cancer insurance plans which also cover multiple unrelated cancers subject to the company’s underwriting decision.
Waiting Period Clause
It is important not to overlook the waiting period clause in the plan while looking at benefits part only. The lesser is the waiting period the better it is. The waiting periods under your cancer insurance plan could be of 2 types:
 
Initial Waiting Period: There is an initial waiting period, which usually ranges from 90 days to 180 days from the policy inception date. During the initial waiting period, the policyholder cannot claim from his/her cancer insurance policy.
 
Survival Period: To be eligible for the claim, the insured has to survive a specified number of days (usually it is 7 days for most of the plans) from the date of diagnosis of cancer known as survival period.
  • HDFC Cancer Care, Max Life Cancer care, Future Generali Cancer  Protect Plan has 7 days survival period clause.
  • Aegon i cancer plan from Aegon Life does not have any survival period clause, that means the claim could be payable just after the diagnosis of cancer (subject to policy contract terms).
 
Look for Waiver of Premium (WOP) & Income Benefit
On being diagnosed with cancer, the productivity, the earning capacity, the health of the patient deteriorates. There could be a loss of regular flow of income and incapability to manage the allied expenses apart from the treatment for the smooth running of the household  especially if the patient is the sole bread earner. Cancer insurance plans offer inbuilt or additional benefits like “Waiver of Premium” and “Regular monthly Income” to provide the cushion effect in the times of distress.
  • Waiver of Premium, where the future premium  is waived off for 3 to 5 years or for the remaining policy year (after cancer is diagnosed) is another important benefit offered by most of the cancer insurance plans. Now, at which stage and for what duration, the plan offers a waiver of premium  also varies with plan.
  • The Income Benefit, offers a regular monthly income which is usually 1% to 2% of the sum insured on diagnosis of the major stage cancer payable for 5 years in most of the cancer insurance plans. 
Now, to get these benefits (apart from the lump sum benefit), the premium could be higher as compared to the plans which do not offer such benefits. But getting that additional financial support by the way of waiver of premium and income benefit at a nominal price should be opted for.
 
Example, HDFC Life Cancer Care Plan comes in 3 different variants depending upon the benefits under the plan.
Plan Variants Lump sum Payout Waiver of Premium Income Benefit Premium *
HDFC Life Cancer Care- SILVER Available Not Available Not Available Rs 1,162
HDFC Life Cancer Care- GOLD Available Available Not Available Rs 1,808
HDFC Life Cancer Care- PLATINUM Available Available Available Rs 2,642
*For 35 year old Male, Non Smoker, SI:10 Lakh
 
Wider Policy Term
It is important to consider the policy term before finalizing your cancer insurance plan. Check for the plan offering maximum policy term, as per your current age. The wider policy term will give you the coverage and protection for a longer term at the same premium cost throughout the policy term.
 
Max Life Cancer Insurance plan offers maximum policy term as 40 years subject to maximum maturity age of 75 years. This means if an individual at age 35 buys the Max Life Cancer plan, the maximum policy term bought can be for 40 years  (35 years -Age of insured + 40 years - as Policy Term = 75 years- maximum maturity age) where as if an individual buys a Max Life cancer plan at age 45 years, the maximum term which can be opted is 30 years only under the plan subject to the maximum maturity age of 75 years (45 years- Age of insured +30 years – as Policy Term = 75 years- maximum maturity age)

Other cancer plans which offer wider policy term are:
No. 

Cancer Insurance Plans

Policy Term

1

Aegon I cancer

Min: 5 years, Max: 75 years – Entry Age

2

HDFC Life Cancer Care

Min: 10 years, Max: 20 years

3

Max Life Cancer Insurance Plan

Min: 10 years, Max: 40 years

4

Future Generali Cancer Protect Plan

Min: 5 years, Max: 80 years – Entry Age

5

PNB MetLife Mera Heart and Cancer Care- Gold

Min: 10 years, Max: 20 years

6

ICICI Pru Heart/Cancer Protect

Min: 5 years, Max: 40 years

 
Conclusion:
Be wise and choose the right cancer insurance plan for yourself. The premium cost of such insurance plans is minimal as compared to the benefits offered under them which will financially compensate you in the hour of need. It is important to note that the cancer insurance in any way is not meant to replace your existing health insurance plan rather it is a supplementary insurance plan which will stand as a rock in those distress times when being diagnosed with cancer.
 
(Disclaimer: The examples in the article of various cancer insurance plans {which are offered by different insurance companies} are used solely for the explanation of the concept)
 
The author, Harjot Singh Narula is Founder & CEO of ComparePolicy 

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