Because Cancer Is Cancer
There is exclusive insurance for it
The bottom line is, until we're helping people to stop smoking, screening for breast cancer, giving Pap sm ears, giving prenatal care to pregnant women, we should not go into publicly paying for the artificial heart, which will benefit at great cost only a few people.
~ Richard Lamm
An interesting commercial from an insurance-selling portal has been on the air for a while now. It starts with a joyful doctor telling a patient that he has been successfully treated for cancer. The patient, instead of being happy, appears to be remorseful and says, “I should have bought cancer insurance…” (He is sad because he had to spend all his life's savings for the treatment.) Let's face it. Cancer instils fear, yet it is a modern-day reality. It comes unannounced and anybody can fall prey to it. The fight against this dreaded disease is tough and only the sufferers and their carers can tell how cancer breaks them not just physically but mentally and financially as well. Depending on the form of cancer, its stage and treatment options, one has to shell out anywhere between Rs 5 lakh and Rs 50 lakh for treatment and care. Helpless as the scenario may look, one can consider taking up an insurance plan that will at least help in handling the ‘financial'
stress. If you thought your existing health insurance or critical illness plan will come to your rescue, you must know that those plans do not cover cancer. The following report compares five major cancer insurance policies on parameters that are relevant to consumers.
Subas Tiwari & Gopal Ravi Kumar
Why buy a cancer insurance policy in the first place? The following factors may have a role: a) The existing insurance cover by way of a critical illness plan does not fully cover the costs of cancer treatment (which may stretch for a longer time). b) Once a person is diagnosed with cancer, there are insurance policies that cover treatment only in advanced stages of the ailment. c) The additional financial burden that cancer brings may be more than what the patient/ patient’s family is able to bear, even after taking their existing insurance policies into account. As of now, only five life insurance companies offer cancer plans. Almost all of them offer non-linked (not linked to market for growth as indicated in units) and non-participating (no bonus or any other benefit) insurance plans. The parameters on which we compared these plans as well as some standard features are discussed here.
When buying a policy, the insured sum and the premium to be paid are decisive factors. At the same time, a host of other factors also come into play, such as the type of plan chosen; the age of the individual buying the same; and one’s expectations from the plan.
Salient Features of Cancer Insurance Plans
a) All policies offer lump-sum payouts once the policyholder is afflicted with the disease.
b) Lump-sum payouts are given at early stage (also called minor/mild stage), major stage (also called moderate stage), and severe stage (also called critical stage) of cancer.
c) While some plans offer waiver of future payouts of premium (also called waiver), some offer death benefit to the nominee.
d) While most of the companies also offer surrender benefit (after a specific lock-in period), some offer a loan on assignment basis to meet the insured individual’s need (for which they could be surrendering the policy). e) Once a lump-sum payment has been made for treatment (for any stage of cancer), the policy gets extinguished.
f) Some companies offer a combination of heart diseases cover and cancer cover, with the option to receive monthly income for prolonged treatment for both ailments. g) No claim is entertained within 180 days of the policy date – this is called the waiting period and it starts immediately after the policy has been bought. h) The maximum entry age under this plan is 65 years.
Exclusions
a) Sexually transmitted diseases (STD), AIDS or HIV
b) Any preexisting condition
c) Any congenital condition
d) Any critical illness or its signs or symptoms having occurred within the waiting period of 180 days from policy commencement
e) Complications arising due to the influence of narcotic drugs, alcohol or other such psychotropic substance not prescribed by the treating doctor
f) Treatment for injury or illness caused by activities wherein chances of getting injury are high. For example, injuries caused during activities like hunting, mountaineering, racing, scuba diving, and aerial sports like hang-gliding and ballooning are not included under the cover
g) Unreasonable failure to seek or follow medical advice, or delayed medical treatment in order to circumvent the waiting period or other conditions
Some Ifs
a) The lump-sum payout at any stage will be reduced to the extent of any payouts at an earlier stage. For example, if 25 per cent has been paid in the early stage, the same will deducted and only 75 per cent of the sum insured will be get paid at another stage. b) There is an initial waiting period of 180 days from the date of commencement of the policy or from the date of reinstatement of the policy, for the diagnosis and valid claim to be admissible under this policy. c) There is no death benefit. If a patient dies within the waiting period, 100 per cent of the premium is refunded to the family. d) In some plans there is a mandatory seven-day survival period, according to which a cancer patient has to survive for seven days from the date of diagnosis to make an insurance claim.
Tax Benefits
Under Section 80D of Income tax Act, a deduction of Rs 25,000 per assessment year is available to an assessee for premium paid for medical insurance. For senior citizens, the deduction is Rs 30,000. For premium paid towards medical insurance of dependent parents, spouse and children, the deduction allowed is Rs 30,000 per assessment year.
As per the Stages of Cancer
Typically, there are four stages of cancer: carcinoma in situ (CIS), early stage, major stage and critical stage. As far as payouts are concerned, insurers normally treat the first two stages in the same way and the last two similarly. Carcinoma in situ (CIS): In the first-ever diagnosis of a histologically proven stage, the cancer cells have not yet penetrated the basement membrane or invaded the surrounding tissues. Early stage: In this stage, there is presence of any of the specified malignant conditions that can invade and destroy nearby tissue. (Payment of lump sum ranging from 20 per cent to 25 per cent of sum insured is made at this stage.) Major stage: This stage is characterised by the first-ever malignant tumour with uncontrolled growth and spread of malignant cells, with invasion and destruction of normal tissues. (Lump-sum payment of up to 100 per cent of sum insured is paid at this stage.) Critical stage: Any cancer that meets the definition of ‘major stage’ and where the insured individual’s oncologist has determined that the cancer has progressed to Stage IV is the critical stage. (Payment of lump-sum amount ranging up to 150 per cent of sum insured is possible at this stage.)
Takeaways for Consumers
a) Go for a plan that offers a combination of death/nominee benefit with maximum benefit during the
three stages of the disease (such as gold/platinum plans). b) Go for maximum sum assured with minimum exclusions and maximum inclusions.
We compared the five cancer insurance plans on parameters such as maximum and minimum policy term, maximum sum assured, premium payment option, maximum maturity age, death/nominee benefit, surrender benefit, assignment benefit and minimum entry age. We gave the highest weightage (15 points) to consumer feedback, based on which the most important and beneficial variables were shortlisted.