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The risk of cancer is real. Every year new studies are showing increasing instances of cancer in the country. So, we need not waste time over whether a cancer cover is important.
There are three options for anyone looking for a cancer insurance policy. One, to buy a regular critical illness plan where cancer will be one of the many listed illnesses that will be covered. The second option is to buy any of the cancer-specific plans launched by life insurers which offer more comprehensive coverage compared to CI plans. The third option is to buy indemnity-based cancer plans that come with life-long renewability and are cheaper to the defined benefit cancer plans of life insurers.
Options available
To cover medical costs for cancer treatment (provided you do not suffer from it already), you can buy a cancer-specific policy from a life insurance company; you can also buy a critical illness (CI) policy where cancer is one of the 20-plus diseases that will be covered. The cost of treatment for cancer will be covered under hospitalisation (medi-claim) policies too, but the premium will be significantly higher if you want a cover for higher sums, say ₹20/25 lakh.
Also, the plain-vanilla medi-claim plans may not cover chemotherapy and other procedures which do not require a day’s hospitalisation. So, the choice is actually between CI plans of general insurers and cancer plans of life insurance companies.
Recently, two health insurers have launched indemnity-based cancer policies, which are very attractive and can be considered too.
In indemnity plans, the actual cost of hospitalisation is what is reimbursed unlike the defined plans where the entire cover amount is given on the diagnosis of cancer in the policyholder.
Cancer-specific plans
In CI plans, the major shortcoming is that they cover cancers of only specified severity. Apollo Munich’s Optima Vital and Max Bupa’s CritiCare, for instance, do not pay out if it is carcinoma in situ (an early stage cancer). Rather, it is better you go for cancer-specific plans offered by life insurance companies such as ICICI Pru Cancer Protect or Max Life’s Cancer Insurance Plan or HDFC Life’s Cancer Care. The advantage with the cancer-specific policies of life insurers over CI plans is also that they waive premium once cancer is diagnosed. In Max Life and ICICI Pru Life’s cancer policies, for instance, premium on the policy is waived off for the rest of the term, if the policyholder is diagnosed with an early stage cancer.
However, when it comes to the time period of coverage under insurance, in CI plans, you get life-long renewability — a key benefit. In cancer policies of life insurers, the policy term is fixed.
Indemnity plans
You have a few indemnity plans, too, in the market that addresses the gaps in the defined benefit cancer plans where the benefit of the policy is paid lumpsum at the first diagnosis of cancer and the policy terminates. The individual in such cases is not protected if the cancer recurs. But indemnity plans such as Apollo Munich iCan and Religare Health’s Cancer Mediclaim cover you even after a claim is made.
Also, unlike the plans of life insurers which terminate when the individual turns 70/75 years, these policies are renewable life-long.
If you want to cover the cost of hospitalisation for cancer treatment, indemnity plans are a better choice.
You can go for defined benefit cancer plans of life insurers if you think you need a back-up to settle the outstanding liabilities.
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