Cancer – A topic which is neither pleasant to write about nor to read about. Nevertheless, a topic which cannot and should not be avoided totally. Cancer brings with it not just immense physical and mental trauma to the patient and his/her dear ones but can also cause a huge financial strain. The good news is that medical breakthroughs have drastically improved the detection and treatment capabilities thereby pushing up the survival rates for cancer. The bad news is that this comes with a very high price tag which many of us cannot afford. The fight against cancer not only tests our physical and mental endurance but also our financial endurance. It has the capability to dry up our savings and leave us in debt.
A study conducted by the International Institute of Population Sciences (IIPS) has revealed that two out of five cancer patients in India have to borrow money and sell assets to cover the cost of hospitalization.^ Hence to deal with the financial aspect of taking on cancer, many insurance companies have launched cancer-specific insurance plans. Read on to know more about cancer insurance. You’ll also be surprised to know how affordable cancer insurance actually is.
Cancer Estimates for India
- Estimated number of people living with the disease: around 2.25 million
- Every year, new cancer patients registered: Over 11,57,294 lakh
Total Deaths Due to Cancer in 2018
- Total: 7,84,821
- Men: 4,13,519
- Women: 3,71,302
Further, 68% of Indian cancer patients die, compared to 33% in the U.S. A highly probable reason for this is that in many cases the cancer diagnosis itself happens at a much-advanced stage. This can be attributed to limited diagnostic capabilities and awareness as compared to developed countries. Even when an accurate diagnosis is made, many patients cannot afford the charges for the various procedures and drop their treatment mid-way.
Cancer Treatment Costs
Herceptin, a drug which is used for treating breast cancer costs around Rs 75,000/- per course, and a patient could need up to 17 courses. A drug called Avastin used to treat colon, kidney and gall bladder cancer can cost around Rs 8 lakh at around Rs 1 lakh a cycle. A strip of 5 mg tablets of Axitinib, used to treat kidney cancer costs Rs 41,737/-. A 50 ml bottle of Cetuximab, used to treat head, colon, rectum and neck cancer cost Rs 94,544.
These are just a few of the costs. The actual cost of tackling cancer depends on a combination of various factors such as:
Thus, cancer can put you in a tight spot financially. This is where a cancer-specific insurance plan can be of help.
What is the Cancer Insurance Plan?
A cancer insurance plan is a policy that pays a lump sum amount on diagnosis of cancer. The purpose of this insurance is to equip you with the monetary arsenal needed to defeat cancer.
Unlike a health insurance policy which is an indemnity policy and reimburses only to the extent of expenses incurred, a Cancer insurance plan pays a fixed amount irrespective of the actual expenses borne for treatment. The amount paid can be used by the insured for any purpose such as availing the latest and advanced treatment capabilities, consultations with top oncologists, rehabilitation needs, to make good the loss of income due to the disease, travel expenses, food and lodging of caretakers during hospital visits, etc. With this type of insurance, you are at least spared the mental trauma of arranging finances for dealing with the disease.
The lump sum amount paid under cancer insurance cover depends on the stage of cancer. It is a pre-defined percentage of the sum assured. Most plans follow the below-given payment schedule:
|Diagnosis of||% of Applicable Sum Assured|
|Early-stage cancer or carcinoma-in-situ||25%|
|Major cancer||100% less early-stage cancer or carcinoma-in-situ claim, if any|
It may be noted here that where early-stage cancer or carcinoma-in-situ claim is made, the policy does not cease. It continues and if there is a relapse and major cancer benefits are paid then the policy ceases.
Richa is a 34-year-old fashion designer who has been diagnosed with early-stage breast cancer. She has a Rs 30 lakh cancer insurance cover. So as per the terms of her cancer insurance policy for early-stage cancer, 25% of the sum assured (Rs 7.5 lakhs) is paid to her. The policy continues. After a couple of years, the cancer relapses and as per pathological reports and clinical assessment by her oncologists, it is confirmed that the cancer is in a highly advanced stage. As per the terms of the policy for major cancer, the balance 75% of the sum assured (Rs 22.5 lakhs) is paid to her and the policy ceases.
Salient Features of Cancer Insurance
- Wholesome coverage: It covers cancers across various stages i.e carcinoma in-situ, early-stage cancer and advanced/major stage of cancer.
- A pre-issuance medical checkup is not required for most plans.
- Waiting period: There is a waiting period of 180 days from the commencement of the policy to become eligible to make a claim. If any symptoms or cancer detection happens within the first 180 days, the claim is not admissible.
- Survival clause: Most insurers have a 7-day survival period from detection of cancer for the claim to be admissible. There are also plans where there is no survival clause.
- Maturity benefit: There is no maturity benefit.
- Surrender benefit: There is no surrender benefit.
- No claim bonus: Some cancer insurance plans have a no-claim bonus i.e a fixed percentage of the initial sum assured is added for every claim-free year beginning from the first policy anniversary till the increased sum assured becomes 200% of the initial sum assured or till any claim arises.
Rajesh is a 35 year old architect who has purchased cancer insurance of Rs 30 lakhs. For the first five years, there are no claims in his policy. Accordingly, at the end of each policy year 10% of the initial sum assured (10/100*30,00,000) i.e. Rs 3 lakhs is added to his policy.
At the end of 5 years, his no-claim bonus amounts to Rs 15 lakhs (3,00,000*5). Now his total sum assured stands at Rs 45 lakhs (30,00,000 + 15,00,000). His increased sum assured can go up to a maximum of Rs 60,00,000/- (200% of initial sum assured 30,00,000/-) provided no claims arise in the policy.
In the 6th policy year, unfortunately, he is diagnosed with early-stage prostate cancer. As such he is paid 25% of Rs 45 lakhs i.e. Rs 11,25,000/- and the policy continues. However, since a claim has arisen, no further no-claim bonuses will be added to the policy.
- WOP: Waiver of premium option available whereby premium for the next 3-5 years is waived off on receiving a valid claim of a cancer diagnosis.
- Income benefit feature: If this feature is availed, a specific percentage of the sum assured (usually 1%) is paid as monthly installments for a certain no. of years (as per policy specifications). This helps provide an assured monthly income. In case of the policyholder’s death in the interim, the monthly installments are payable to the nominee as scheduled.
- Coverage for spouse: Some companies also allow both spouses to be covered under the same cancer insurance plan. However, unlike a family floater health insurance policy, the covers for both spouses are independent of each other, with an option to choose different coverage amounts for each.
- Tax benefits are available under section 80D of the income tax act.
Premium Rates for Cancer Insurance Cover
The below table depicts premium payable for a Male and Female for a sum assured of Rs 20 lakhs and policy term of 20 years under Future Generali Cancer Protect Lumpsum:
The premium rates are higher for females than males. This is because it is statistically proven that females are more prone to cancer than males. For every 1 lakh of population, 326.3 women die of cancer compared to 103.1 men. Also, there are specific cancers that affect only women such as breast cancer (27%), cervical cancer (21%) and ovarian cancer.
Distinguishing Features of Cancer Insurance in Comparison to Critical Illness Insurance
1) Covers Early-Stage Cancer:
Most of the critical illness plans cover cancer. So a diagnosis of cancer is sufficient to get the sum assured amount. Is that what you think? If yes, then you are wrong. The truth is that only cancers of a certain severity are covered and the exclusions section of critical illness plans need to be read carefully to know this. The critical illness plans usually have some cancer-specific exclusions like a pre-malignant tumor, non-invasive cancer (cancer in situ), prostate cancer stage 1 (T1a, 1b, 1c), etc. On the other hand, a cancer insurance plan covers most types of cancers, both at an early and advanced stage. Due to better awareness and improved detection capabilities, many cancer cases are diagnosed at very early stages. This, in turn, can massively improve the survival rate and control further spread of the disease if the right treatment is taken at the right time. A cancer insurance plan pays for early-stage cancers and thus helps arrest the problem in its very infancy.
2) Continuing Plan Coverage:
At times, cancer recurs or comes back after a period of time. This is called a relapse. A critical illness plan allows you to make only a single claim. Once a disease is diagnosed and the sum assured is paid the plan ends. This may bode well with other diseases but for a disease like cancer which has a likelihood of relapse this feature of a critical illness plan is highly restrictive. However, a cancer insurance plan pays a certain % of the sum assured depending on the stage of cancer and the plan continues. For eg: Most plans pay 25% of the sum assured on diagnosis of an early stage cancer and the plan continues Subsequently if cancer proceeds to a major stage, the balance 75% of the sum assured is paid. Also, a waiver of premium option exists in most plans whereby after a diagnosis, future premiums for some years are waived off by the company.
3) Survival period is very less compared to critical illness plans:
Critical illness plans usually have a mandatory survival period of around 30 days after diagnosis, only after which a claim can be made. Cancer insurance plans also have a survival period but it is restricted to 7 days and some plans do not even have a survival clause. With this feature, there is minimal or no time loss in accessing the claim amount and best possible treatment can be initiated without delay in an absolutely seamless manner.
Should You Opt For Cancer Insurance?
A cancer-specific insurance plan should definitely be given a thought by those who have a high-risk of cancer such as people with a family history of cancer, those with exposure to radiation, passive smoking, obese people, lifestyle (smoking/tobacco consumption), etc. Nearly 45% of all cancers among males and 17% among females in India and more than 80% of oral cancers are directly attributable to tobacco use. Women are more prone to cancer than men as certain cancers affect only women. As such, they need to seriously consider buying cancer insurance.
Cancer is one of the most well-researched diseases, yet complete prevention of this disease is still elusive. Though maintaining a healthy lifestyle and avoiding smoking/tobacco consumption etc can reduce our chances of getting certain types of cancers there is no guarantee that we cannot get cancer. Besides a healthy lifestyle, we should be prepared with a financial plan to deal with cancer should this deadly disease strike us. At least, with cancer insurance cover we can be spared the financial trauma if not the physical and mental agony of dealing with cancer.
*http : //cancerindia.org.in/cancer-statistics/
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