What is Cancer Insurance?
The incidence of cancer is on the rise across the world. Changes in lifestyle, genetics, and environmental factors are attributed to be the reasons for the sharp increase in the figures. In India alone, studies have indicated that the new cases of people suffering from cancer will rise from 14 lakh (as per records from 2016) to 17.3 lakh by 2020. According to reports consolidated by the World Health Organisation, India ranks among the top three countries with the largest number of patients suffering from haematologic cancer.
Cancer insurance is a type of insurance plan that is configured to offer financial assistance to patients diagnosed with the disease. The policy will, however, have a waiting period that has to be fulfilled before the coverage kicks in and offers protection to the insured.
The premium for cancer insurance is usually paid at various stages of diagnosis and treatment, i.e., carcinoma in situ (CIS), initial stage, major stage, or critical stage. A cancer insurance policy does not offer the insured any maturity, surrender, or death benefit.
Why Should People Buy Cancer Insurance?
With the rising cost of medical treatments, a patient who suffers from cancer would take a big hit in terms of financial obligations. It is estimated that the cost of medical diagnosis and treatment (including surgery, chemotherapy, radiation, hospitalisation, etc.), would be anywhere between Rs.2.5 lakh and Rs.20 lakh for a 6-month period. So being prepared with a suitable insurance plan has now become a necessity, more so for people who have a history of cancer in the family.
In order to qualify for cancer insurance, an individual should not be suffering from any pre-existing conditions that are linked to cancer. People who have been previously diagnosed with and treated for the disease cannot apply for the insurance as well.
Types of Cancer Offered Coverage Under Cancer Insurance Plans:
Cancer can be broadly classified into four main stages:
- Carcinoma in Situ (CIS) - If the patient has been affected by cancer for the very first time, this stage is when the cancer cells would not have fully penetrated to the surrounding tissues.
- Early stage - In this stage, a malignant condition can invade and destroy the nearby tissues.
- Major stage - There will be a malignant tumour that grows uncontrollably. The malignant cells destroy normal tissues as well.
- Critical stage - When a cancer is identified to be in major stage and the oncologist has classified it as Stage IV, then it is referred to as the critical stage.
The cancer insurance plans offered by life insurance companies in India offer specific coverage pertaining to different stages that the disease is detected at.
- Max Life Cancer Insurance Plan - The coverage varies by the stage of cancer detected, i.e., CIS, early stage, and major stage. For major stage cancer, the maximum benefit offered is 100% of the indexed sum assured minus CIS/early stage claim that is already paid. An income benefit of 10% of the sum assured is also paid for 5 years following the diagnosis.
- Aegon Life iCancer Insurance Plan - The insurer has specifically designed this scheme to provide the much-needed financial assistance for the treatment of cancer at every stage of the disease. The stage-based benefits offered by the plan include the following:
- A lump sum payout is provided at any stage of the disease.
- Once the claim for a major stage cancer is approved, the future premiums will be waived off.
- The accumulated payment increases when the cancer progresses to more severe stages.
- For minor stage cancer diagnosis, 25% of the sum assured is paid out.
- In case the insured has been diagnosed with major stage cancer, 100% of the sum assured is paid out as long as there are no previous claims under the policy.
- If the insured has been diagnosed with critical stage cancer, he/she will receive 150% of the sum assured as payout, provided that there have been no prior claims under the policy.
- HDFC Life Cancer Care Plan – HDFC Life Cancer Care Plan is available in three variants and all options offer lump sum payouts based on the stage of the disease, i.e., CIS, early stage, or major stage.
- ICICI Prudential Heart/Cancer Protect - This insurance plan offers coverage for all minor conditions such as early stage cancers and CIS of any organ (except skin). It also protects from major conditions such as cancer of a specified severity.
- PNB Metlife Mera Cancer Care - Coverage is offered under this plan for three types of claims:
- Mild claim - This includes the diagnosis of CIS or early stage cancer.
- Moderate claim - This includes mastectomy for CIS of the breast, orchidectomy for CIS of the testis, cystectomy for CIS of the urinary bladder, and abdominal hysterectomy and bilateral salpingo oophorectomy for CIS of the cervix.
- Severe claim - This includes all major cancers.
Top 5 Cancer Insurance Plans in India:
Some of the most popular cancer insurance plans in the country are offered by leading insurance providers in the market, i.e., Max Life, HDFC Life, ICICI Prudential, Aegon Life, PNB Metlife, etc. The key features of these plans are tabulated below:
|Plan name||Features||Entry age||Sum assured||Policy term||Waiting period|
|Max Life Cancer Insurance Plan||
||Minimum - 25 years Maximum - 65 years||Minimum - Rs.10 lakh Maximum - Rs.50 lakh The sum insured can be chosen in multiples of Rs.5 lakh||Minimum - 10 years Maximum - 40 years||180 days from the date of policy commencement|
|Aegon Life iCancer Insurance Plan||
||Minimum - 18 years Maximum - 65 years||Minimum - Rs.10 lakh Maximum - Rs.50 lakh||Minimum - 5 years Maximum - 70 years minus entry age||180 days from the date of policy commencement|
|HDFC Life Cancer Care Plan||
||Minimum - 18 years Maximum - 65 years||Minimum - Rs.10 lakh Maximum - Rs.40 lakh||Minimum - 10 years Maximum - 20 years This is subject to maximum maturity age of 75 years||180 days from the date of policy commencement|
|ICICI Prudential Heart/Cancer Protect||
||Minimum - 18 years Maximum - 65 years||Minimum - Rs.2 lakh Maximum - Rs.50 lakh||Minimum - 5 years Maximum - 40 years||6 months from the date of policy commencement|
|PNB Metlife Mera Cancer Care||
||Minimum - 18 years Maximum - 65 years||Minimum - Rs.5 lakh Maximum - Rs.40 lakh||10, 15, or 20 years||180 days from the date of policy commencement|
Features and Benefits of Cancer Insurance Plans:
Some of the key features and advantages of taking cancer insurance plans are as follows:
- The lump sum payment that is provided to the claimant will be reduced based on earlier claims. So, for instance, if 100% of the sum assured is expected to be paid to the insured at the diagnosis of a major stage cancer and 25% was already paid in the early stage, he/she will only receive 75% of the sum insured at the latter stage.
- A cancer plan does not offer death benefit to the beneficiary, unlike other life insurance schemes.
- Almost all cancer plans have a waiting period of 180 days from the start of the policy coverage. Also, the cancer patient is required to survive for 7 days after the cancer diagnosis for claims to be valid.
- All cancer insurance plans offer coverage based on the stage at which the disease was diagnosed. Usually the payouts are in the form of lump sum amounts.
- Most cancer plans offer waiver of premium coverage. Some of them even offer a regular income benefit for a fixed period of time. This is usually a percentage of the sum assured.
- Most cancer insurance plans offer a hike in sum assured if the policyholder does not make any claims in a policy year.
- One of the most notable benefits of buying a cancer insurance plan is that the insurance coverage will continue even after the first diagnosis of the disease.
- All cancer insurance plans offer tax benefits under Section 80D of the Income Tax Act.
Eligibility and Documents Required for Buying Cancer Insurance:
The following eligibility conditions are applicable for most cancer insurance plans available in the market today:
- Insurance companies usually offer cancer insurance plans to individuals in the age group of 18 years to 65 years. Some insurance companies allow minors to be protected with a cancer insurance plan, provided that either one of the parent is also protected by the plan.
- The customer can choose a policy term up to 20 years, provided that the maximum maturity age does not exceed 75 years.
- Coverage is offered for cancer diagnosis at various stages of the disease.
- A waiting period of 180 days will have to be fulfilled for the coverage to be activated.
- An individual who survives for at least 7 days after the diagnosis of the disease is eligible for the coverage.
- The minimum sum assured under most cancer plans is Rs.5 lakh and the maximum sum assured is Rs.50 lakh.
- Skin cancer is not covered under the cancer insurance plans offered by some insurers.
The documents required to purchase cancer insurance are as follows:
- The customer will be required to furnish an ID proof and proof of age.
- Medical test reports that indicate that the individual is not suffering from cancer or any related disease is usually required.
- Insurance companies also request for income and address proof of the customer.
- Bank statement and passport-size photographs of the customer will have to be submitted as well.
Any other document specifically requested by the insurer on a case-by-case basis should be submitted.
Exclusions in a Cancer Insurance Plan:
The exclusions applicable to most cancer insurance policies are as follows:
- The insurance company will not pay any benefit to the policyholder if the diagnosed cancer was due to any of the following conditions:
- Sexually transmitted diseases, such as HIV or AIDS
- Congenital conditions
- Intoxication by drugs or alcohol
- Nuclear, biological, or chemical contamination, also referred to as NBC
- Organ donation
- Attempted suicide, self-inflicted injuries, etc. will not be covered
- Pre-existing diseases are not covered
How Do I Make A Claim under a Cancer Insurance Policy?
The insured should raise a claim under the cancer insurance policy as soon as he/she is diagnosed with the disease. The policy coverage would offer the insured benefits such as lump sum payouts, regular income, waiver of premium, etc. based on the policy terms and conditions.
- In order to raise a claim under cancer insurance, the claimant can login to the website of the insurance company and click on the menu option pertaining to the same. It is also advisable to call the insurer and inform the company of the claim. This may help in getting the claim process moving at the earliest possible time.
- The claimant is also required to submit all relevant documents to support the claim settlement process.
- Alternatively, the claimant can go to the branch office of the insurer and report a claim with supporting documentation.
Things to Consider Before Buying a Cancer Insurance Plan:
Before taking a cancer insurance plan, it is advisable to do some research and be well-prepared to make a judicious purchase decision. The following points should be specifically noted:
- Robust sum assured - The cost of medical expenses have been on the rise for a long time now. To have a secure financial safety net to protect against this, it is advisable to opt for a cancer insurance plan with a high sum assured. This will provide you adequate financial relief during the taxing time of a cancer diagnosis.
- Multiple stages of cancer - Opt for a plan that offers coverage for all stages of cancer, i.e., CIS, early stage, critical stage, etc. Such cancer insurance policies will also provide coverage for the expenses incurred for treatment at specific stages of the disease.
- Waiting period and survival period - Waiting period is the amount of time the insured will have to wait before the policy offers coverage. Survival period is the amount of time the insured will have to be alive for (after the cancer diagnosis) in order to avail the benefits of the policy. It is crucial to check the waiting period and survival period of a policy before deciding to purchase it.
- Additional policy benefits - Most cancer insurance plans offer regular income benefit and waiver of premium benefit at specific stages of cancer. Check the clauses pertaining to these benefits and opt for a policy that provides maximum coverage in the most economical way.
- Policy term - Buying a cancer insurance plan that has a high policy term ensures that the insured will be financially protected for a longer duration.
Cancer Insurance Plan versus Critical Illness Rider Plan versus Mediclaim Policy:
Health insurance/mediclaim plans offer indemnity coverage that pays only for the hospitalisation of the insured individual. On the other hand, cancer plans offer coverage for all expenses incurred following a cancer diagnosis. The payout provided to the insured is dependent on the stage of the disease.
Critical illness plans may have some exclusions regarding cancer, such as pre-malignant tumor, prostate cancer - stage 1, cancer in situ (CIS), etc. Cancer plans offer more exhaustive coverage and provide protection against various stages of cancer, even mild stages.
Some of the key differences between a cancer insurance plan, a critical illness plan, and a mediclaim policy are as tabulated below:
|Parameter||Cancer Insurance||Critical Illness Plan||Mediclaim/Health Insurance Plan|
|Coverage||Cancer insurance plans usually offer coverage against all stages of the disease, i.e., pre-stage, early stage, and major stage.||This plan offers coverage for some common critical illnesses that are clearly specified in the policy document. It may not cover all stages of cancer. The payout received from the plan can be spent by the policyholder in whatever way he/she chooses.||This plan offers coverage for the actual surgical and medical expenses incurred. The coverage is also limited to hospital expenses with stringent sub-limits on room rent.|
|Ideal for||This plan is suitable for people who understand the risks of cancer and the cost of treatment of the disease. It should be noted that a cancer insurance plan can be bought along with a basic health insurance policy. This will enhance the health insurance coverage received by the insured.||This plan is ideal for people who desire protection from several critical illnesses, not just cancer. People who are at high risk for developing a specific critical illness can also opt for this plan. An individual can buy a basic health insurance policy and then avail a critical illness cover for added protection.||This is a basic health insurance scheme that every individual should be protected with. A basic health insurance plan will shield one against rising medical costs. This plan should ideally be given precedence over the other two plans. However, an individual who is at high risk for cancer/other critical illnesses but is insured with only a basic plan will find the coverage inadequate.|
|Policy term||This scheme can be availed for a long term, such as 20 years.||This plan can be taken for a long policy term, like 20 years.||This plan has to be renewed after 1 or 2 years.|
Cancer Insurance FAQs:
- Where can I get the medical examination done for taking a cancer insurance plan?
Usually an authorised representative from the insurance company will contact you and fix an appointment with an approved medical examiner. Get in touch with your insurer for more details.
- What are the tax benefits offered by a cancer insurance plan?
All premiums paid towards a cancer insurance policy and the benefits received are liable for tax deductions under Section 80D of the Income Tax Act, 1961. However tax benefits are subject to change from time to time. Hence, you should check with an authorised tax consultant for the latest provisions.
- What happens if I stop paying premium towards my cancer insurance policy?
If you do not pay premiums within the grace period, the policy will move into lapsed status. No benefits will be payable further. You can choose to reinstate a lapsed policy by following certain procedures laid down by the insurer.
- I have bought a cancer insurance policy but I am not happy with the terms and conditions. Can I return it?
If you are dissatisfied with the cancer policy you have purchased, you can return the same back to the insurance company with a letter stating the reasons for the objection. This should be done within 30 days of receipt of the policy document. Once the policy is returned, it will be terminated. Premium that has been paid will also be returned.
- I have a family history of cancer. Can I take a cancer insurance plan?
The insurer would usually request for a detailed description of your immediate family members’ history of the disease. The insurance will be provided to you based on underwriting.