Personal Finance

HDFC Life’s Cancer Care plan: A goodback-up choice

Rajalakshmi Nirmal | Updated on February 17, 2019 Published on February 17, 2019

Cancer Care has closed a few old gaps, but indemnity plans still give better benefits

In 2015, HDFC Life became the first life insurer to launch a specialised policy to cover cancer. But over the past three years many players have launched cancer plans offering a more comprehensive coverage. To catch up with the current market, HDFC Life has relaunched its flagship product — Cancer Care — with some enhanced features. It has increased the policy term and the sum assured. Here’s a review of the plan.

Features

HDFC Life has tried to address the lacunae in the old version of the Cancer Care plan in the new version.

While the earlier plan provided protection only till 75 years of age and capped the maximum term at 20 years, now it offers cover till the individual is 85 years of age, and the maximum term offered is 85 minus the individual’s age. Second, the plan now covers children from the age of five years. Earlier, the entry age was 18 years.

Further, under the new plan, the sum assured offered has been increased to ₹50 lakh, up from ₹40 lakh earlier.

The other features of the policy, however, remain the same. Cancer Care continues to be a defined benefit plan — once a claim is raised and the benefit is paid out, the policy is terminated.

If it is an early-stage cancer, 25 per cent of the sum assured is paid and the premium is waived for three years. If the cancer advances into the later stages, the balance sum assured is paid and the policy terminates. The policy has three options — silver, gold and platinum. The premium waiver after the claim for early-stage of cancer is available in all three plans.

In the gold plan, the additional feature is: for every no-claim year, the sum assured increases by 10 per cent (this will continue till the sum assured becomes 200 per cent of the initial sum assured). In the platinum plan, the extra benefit is: once diagnosed with late-stage cancer, apart from the lump-sum amount of the sum assured, the policyholder or his/her nominee will get 1 per cent of the sum assured as a monthly income for the next five years. The income benefit will continue even after the policy terminates once the sum assured is paid.

Our take

HDFC Life’s new Cancer Care plan is attractive because it offers the longest coverage among all cancer plans in the market. In ICICI Prudential’s Cancer Protect and Max Life’s Cancer Insurance Plan, the maximum term offered is 40 years and the maturity age is 75 years. In Aegon Religare’s iCancer plan, the maturity age is at 70 years. Also, in terms of cost, it is cheaper than some of the best plans in the market.

The cost for a ₹20-lakh cover for a 35-year-old female till 85 years of age (50-year term) will be ₹9,969 with Cancer Care (gold plan). For the same individual, the cover from ICICI Prudential’s Cancer Protect (with the benefit of SA increasing by 10 per cent very year till it doubles) comes to ₹10,871; here the cover is only for a maximum of 40 years, i.e., till the individual turns 75.

However, in some aspects, the new version of Cancer Care still lags peers.

One, under Cancer Care, the premium waiver after diagnosis of an initial-stage cancer is only for three years. In Max Life’s and ICICI Pru’s plans, premiums are waived till the end of the policy term. Two, ICICI Prudential’s Cancer Protect policy offers a maximum sum assured of ₹75 lakh, while HDFC Life’s Cancer Care offers ₹50 lakh.

Today, with the option of indemnity cancer policies (indemnity plans reimburse the actual cost of hospitalisation) — such as Apollo Munich’s iCan and Religare Health’s Cancer Mediclaim — defined benefit plans are not as appealing.

In indemnity plans, the cover can be renewed life-long and protection is offered right from the diagnosis stage. Further, these plans are also way cheaper than defined benefit plans.

In Apollo Munich’s iCan, the cost for a ₹20-lakh cover for a 35-year-old female is ₹3,775 a year.

Under indemnity plans, the one thing you need to note is that the premium will keep changing as per the individual’s age. So, you may need to cough up higher premiums as you age. But that said, in cancer policies of life insurers, too, the premium is not fixed for the entire term; it is fixed only for 3-5 years.

If you want to cover the cost of hospitalisation for cancer treatment, indemnity plans are a better choice. You can go for defined benefit plans if you think you need a back-up to settle the outstanding liabilities.

Published on February 17, 2019

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