Product Review. Give it a shot

Life insurers have been coming up with cancer covers in recent times and the latest one to join the list is Max Life. The Max Life Cancer Insurance plan has some additional features which makes it a tad more attractive than its predecessors.

If you are looking for a cancer cover specifically, it is advisable that you buy it from a life insurer who has a specialised cancer product rather than buying a hospitalisation plan (also called mediclaim plan) or a critical illness plan that covers other risks too. This is because the usual hospitalisation policies and critical illness policies do not cover all types of cancers. Some of them do not cover early-stage cancers. The other reason is that covers from general insurers and health insurers do not have features such as premium waiver and ‘income benefit’ where a certain percentage of the sum insured is paid to cover the individual’s loss of income for a few years.

The Max Life Cancer Plan is an insurance policy that pays the sum insured in lumpsum on diagnosis of cancer. There is no payment assured on maturity of the plan or the insured’s loss of life during the term of the plan. Individuals aged 25-65 can buy the policy. It can be bought offline as well as online (from October 2016).

The policy term is 10 to 40 years with maximum maturity age of 75 years. The minimum sum insured offered is ₹10 lakh and the maximum is ₹50 lakh. The initial waiting period under the policy is 180 days, during which no claims will be honoured.

On diagnosis of an early-stage cancer (or pre-stage cancer), the policy pays 20 per cent of the sum insured and waives all future premiums. The policy will continue to be in force and pay for up to five early stage cancers of different organs and a major stage cancer over the remaining period of the policy term.

When a major stage cancer has been diagnosed, the policy will pay 100 per cent of the sum insured (less amounts already paid) and the policy will terminate.

However, ‘income benefit’ of 10 per cent of sum insured will be paid to the individual or his nominee for the subsequent five years (irrespective of the policyholder’s death or end of the policy term). The other benefit in this policy is that the sum insured increases by 10 per cent (on simple rate) every claim-free year up to a maximum of 150 per cent of the sum insured. A policyholder has to survive for a minimum of seven days from the date of diagnosis of the cancer to be eligible to claim on the policy.

The two popular cancer products in the market are HDFC Life’s Cancer Care and Aegon Religare’s iCancer.

Max Life’s Cancer plan has some additional features that make it attractive. For instance, it has longer coverage. It is possible that individuals can stay on this plan till they are 75. In Aegon Religare’s iCancer plan, the maturity is at 70 years. Further, Aegon’s policy doesn’t have the income benefit.

HDFC Life’s Cancer Care plan has the income benefit. But the maximum sum insured offered is ₹40 lakh and the premium will be fixed only for three years. Max Life’s Cancer plan promises to keep the premium unchanged for at least five years and offers sum insured of up to ₹50 lakh.

Further, HDFC’s plan offers premium waiver only for three years on diagnosis of early-stage cancer after which the policyholder has to continue to pay premiums. In Max Life’s plan, the premium is waived off for the rest of the term once an early-stage cancer (pre-stage cancer) is diagnosed.

Max Life’s Cancer plan appears to be a more comprehensive policy with a wider range of benefits. If you think you are at a higher risk of developing cancer, you may consider this policy.

However, do note that individuals with a history of cancer in the immediate family (parents or siblings) may not be able to get this cover.

Though medical examinations are not required, a detailed disclosure on health needs to be made before you buy the policy.

On premium, Max Life’s plan is a tad expensive. The premium for a 35-year-old woman for sum insured of ₹20 lakh and a 35-year term is ₹9,900 (exclusive of tax). With HDFC Life plan, the cost of the above would be ₹9,706, including taxes, but will be covered only till the age of 55 as the maximum term offered is only 20 years.

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