Cancer Insurance: Why Buy Separate Cover for Cancer
Cancer is a deadly disease that can occur in any part of the human body. Its initial symptoms may not be obvious and the disease is often detected late. It has four stages in which the first and second stage cancers are medically considered to be early and the third and fourth stage are advanced.
The cost of treatment of the disease is very high and delay in taking the treatment can prove fatal for the patient. Moreover, examination has to be done periodically as it tends to spread very fast, and it is likely to reoccur even after the treatment. According to the doctors, the person needs to be very vigilant in the case of treatment and it is necessary to continue to recheck the occurrence of the disease. Brain tumors, blood cancer, lung cancer, breast cancer are some of its types.
How much money does it take to treat cancer?
In general, cancer treatment costs from Rs. 2-3 lakhs to 50 lakh. It primarily depends on the stage, type, city, hospital and many other factors. The treatment cost is so high that the entire financials of the family gets affected. It is a disease in which the sick and his family fight together battles on many front – physical, psychological and financial.
Why buy separate insurance for cancer treatment?
While normal health insurance covers the treatment cost in the form of critical illness rider, the insurance policy specially formulated for cancer treatment is made up of a variety of covers and the sum assured is also high and the premium is less when bought early*.
Benefits of Cancer Insurance Plan
In order to deal with the expenses incurred in the treatment of cancer, the cancer cover plan offers better coverage to the policyholder and many other benefits.
The policy term for cancer insurance plan is longer. The term of the policy is seen in two ways.
- Fixed Term: Some insurance company plans have a fixed term e.g. 30 years. This means that if you are buying this plan at the age of 25, the policy will end at the age of 55 years.
- Maximum Age Limit: The term of the policy is seen by some insurance companies depending on the maximum age limit of the individual. For example, suppose an insurance company has fixed 70 years as the maximum age limit for the term of the policy. Then if a person buys this plan at the age of 30 years, the policy term will be till the age of 70 years, which is 40 years according to the age of this person.
Cancer plan offers higher sum assured than a normal health insurance. Generally, all insurance companies give an assured of Rs. 10 lakh to 50 lakh for treatment in cancer insurance plan. There are many types of cancer and there are many stages in this disease. Considering this, it can be said that the treatment of this disease costs from Rs. 2.5-3 lakh to Rs. 50-55 lakh.
Simple way of releasing money
If the disease is in the early stages, the insurance company releases 20% to 30% of the sum assured money simultaneously. If the disease is in advance stage, the insurance company simultaneously releases 100% of the sum assured and the policy ends there. If the insurance company has already given some money in the early stages of the disease, the remaining money is given after deducting the money from the sum assured, while releasing the money in the advance stage.
For e.g. If there is an insurance plan of 40 lakh out of which Rs. 15 lakhs have been given in the early stages of the treatment, the insurance company will release the remaining Rs. 25 lakhs in the advance stage. As soon as the medical examination reveals the disease, the insurance company releases money for treatment, which does not delay the patient’s treatment.
Indexing facility on sum assured
Cancer related treatment is very costly. As of today, the sum assured is not necessarily enough for treatment. Some insurance companies’ cancer plans have a sum assured fixed for the disease, but some companies facilitate indexing on sum assured.
Fixed sum assured means that the term of the plan, whether it is 10 years, 40 years, if the sum assured of 20 lakh is fixed, it will remain at 20 lakh till the end. What is noteworthy here is that at the end of 40 years, the rupee will lose its value (considering the inflation factor) and the cost of treatment will be high.
Therefore, some insurance companies offers indexing on the fixed sum assured (certain percentage) every year which makes the sum assured money grow. In the middle of the policy period, if a claim is made for cancer, the indexing stops at the same year and the money fixed for the sum assured is fixed there.
For example, if the sum assured is Rs 30 lakh for 10 years when indexing is done every year on a sum assured of 20 lakh. Then, when the cancer disease is detected, a claim is taken from the insurance company. So, after that year, the indexing on money stops and the sum assured is fixed at Rs 30 lakh.
Exemption from filling premiums
There are some insurance companies that detect cancer of the first or second stage and forgive the future premiums. And some companies forgive all the further premiums when the policy holder reaches to the advanced stage.
Income with insurance
There are some insurance plans in which a few percent of the sum assured in the advance stage of cancer is given as income, which is a big recourse at such times. For example, if one has a cancer insurance plan of 20 lakh, and unfortunately he is in the fourth stage of cancer, the insurance company starts giving 1% of the sum assured, which is Rs. 20,000, to the policyholder as income.
The special insurance plan for cancer does not require a network hospital for treatment, nor is it found to be a sub-limit for treatment, as seen in the common health insurance policy. As soon as the disease is detected, money is given together, wherever the treatment can be done.
Other important things to pay attention to in cancer insurance policy –
- No money is paid to the family of the policyholder on death due to illness.
- There is a waiting period of 180 days after taking the insurance plan. If the person dies during the waiting period, the money given as premium is refunded. But this waiting period varies for each cancer insurance provider.
- Cancer plan has a fixed time period in which insurance for cancer of the same place is not paid twice. For e.g. if throat cancer is detected and the claim money is paid by the insurance company for the complete treatment. And after four years, throat cancer is again detected, the insurance company will not provide benefits for the same.
- The premium of the cancer insurance plan is much lower than the premium of the critical illness plan. The premium of the indexing plan is slightly higher.
If you talk about critical illness, the name of cancer first emerges. In this disease, the patient suffers from their share and the family fights many battles at their level. This is the reason why buying a cancer insurance policy to cover the treatment cost is important and should be incorporated into your life in time.
I am Nikesh Mehta, owner and writer of this site.
I’m an analytics and digital marketing professional and also love writing on finance and technology industry during my spare time. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business. I can be reached at [email protected] or LinkedIn profile.