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We all yearn to live a long and healthy life, free of problems, diseases, and badness. However, the reality of life makes us aware of our limitations in combating some of the most dreaded problems of our life.

Two big problems that plague mankind are critical and terminal illnesses. These illnesses are a bane considering the number of people that have been falling prey to such illnesses. The hectic lifestyle that we live makes more people prone to such diseases, and the increasing healthcare costs can have an impact on an individual’s financial resources. 

Cancer is such an illness that has broken families and has devastated mankind. According to the World Health Organization (WHO), one in 10 Indians will develop cancer in their lifetimes, and as of 2018, there have been 1.16 million new cancer cases and 7,84,800 cancer deaths in India. According to an oncologist survey conducted by Edelweiss Tokio Life, 92% oncologists believe that the majority of cancer patients discontinue their treatment due to high costs, which underscores the importance of having a financial cover. While we all may not successfully fight this disease, we can take appropriate measures to keep ourselves and our families financially secure while struggling with these diseases. One such measure is purchasing policies such as critical insurance policy and cancer insurance policy.

What is Critical Illness Policy?

Critical illness policy is a healthcare policy that provides financial coverage against the medical expenses arising out of life-threatening critical illnesses. These diseases can include heart attack, cancer, kidney failure, coma, bypass surgery, stroke, etc. These diseases can cause pain and misery, adding to the mental, physical, and financial breakdown of the family. Regular healthcare policies may not provide a complete cover when diagnosed with a critical illness, and hence a good critical illness policy can protect a family against heavy expenses and help maintain their standard of living. 

When purchasing a critical illness policy, it is extremely important to read the policy document to ensure that all the needs are taken care of by the policy. Normally, all the critical illness policies cover 25-40 major critical illnesses, and one should go through the list carefully to ascertain (s)he is adequately covered.

Advantages


Critical illness policy is beneficial for those individuals who have a history of family members suffering from critical illnesses. A well-selected policy offers the following benefits: 

Lump-sum payout: The insured individual is provided with a lump sum payout on the detection of the critical illness, which can be used to cover all the expenses that will occur in the treatment of the disease. Hospitals bills need not be submitted to claim under this policy.

Lower premiums: Since critical illness policy covers only specific illnesses, it has lower premiums than regular healthcare policies and it is preferable and affordable as a supplementary insurance policy. 

Flexibility: Many insurance companies provide a critical illness policy that can be customized according to one’s needs. 

Disadvantages


One disadvantage of a critical illness policy is that it covers cancer only when it is at the advanced stage (when a malignant tumor exhibits uncontrolled growth in the body). Many critical illness policies are at its nascent stage; hence many companies do not cover cancer at its early stage. 

At the same time, many critical illness policies come at a 90-day survival period, which may not be beneficial in certain cases. A critical illness policy will pay the sum assured at the first detection and will terminate after the payment. This means that the insurance will be of little use to people who may need long term care for dreaded diseases like cancer, which have high chances of relapse.

What is Cancer Insurance?

Cancer Insurance is a healthcare policy that provides financial coverage against the risks associated with cancer. Depending upon the plan, the insured individual is provided financial payout on the diagnosis of cancer, which can be used for all his/her subsequent medical treatments including radiation, chemotherapy, and surgery (at all the stages of cancer). Cancer insurance is necessary during these perilous times as cancer requires long-term care and can drain an individual’s resources significantly. A cancer-dedicated policy commonly covers lung, stomach, ovarian, breast, hypopharynx, and prostate cancer, along with other types (as mentioned in the respective policy document). 

Most cancer policies can be taken by individuals between 18 to 65 years of age with a cover between 5 lacs and 50 lacs. The cancer insurance plan is normally divided according to its severity, and while disbursing the cancer benefit, a certain percentage of the sum assured is paid as a lump sum to the individual as and when (s)he is diagnosed with the particular stage of cancer. If the individual has submitted a claim during a particular stage, then the future payouts will be adjusted accordingly. This policy acts as an indemnity policy, as it not only covers you after diagnosis but also continues lifelong coverage due to the chances of cancer relapse.

Advantages


Cancer Insurance is beneficial for everyone, especially those whose family has a history of cancer. Following are the benefits:

Lump-sum payout: The cancer policy provides a lump sum payout on the detection of cancer, which means all the subsequent treatments can be done without much financial worry. 

High Insurance Cover: Treatment costs for cancer can be extremely high, and hence the policy coverage can be selected to suit our financial needs and cover the expenses related to cancer. 

Premium Waiver: Many insurance policies provide a premium waiver on early detection of cancer, which can help the insured continue the cover without having to pay future premiums. 

Tax Benefits: The premiums paid under this policy are eligible for tax deductions under Section 80D of the Income Tax Act, 1961. 

Free Cancer Check-ups: Many cancer policies provide free-cancer check-ups to the insured during the entire policy term, which helps reduce the financial burden and improve risk-identification.

Cancer Insurance vs. Critical Illness Insurance

CATEGORY

CRITICAL ILLNESS POLICY

CANCER POLICY

COVER

This policy covers various kinds of critical illnesses like kidney failure, cancer, heart attack, etc.

This policy only covers cancer (early, major, and advanced)

EXCLUSIONS

Congenital external diseases, self-injuries, and pre-existing critical illnesses are excluded

Skin cancer and cancers caused due to sexually transmitted diseases, nuclear or chemical contamination, and pre-existing diseases are generally excluded

SUITABLE FOR

Suitable for individuals who have higher occurrences of getting diagnosed with critical diseases due to family history, lifestyle, work stress, or other environmental factors

Suitable for individuals who have a history of cancer and have a higher probability of getting diagnosed with it.

POLICY TERM

Can go up to 20 years

Can go up to 20 years

CANCER BENEFIT

Does not cover cancer at its early stage

Covers cancer at all stages

POLICY CONTINUATION

Once the claim is submitted, the policy will lapse

Payouts are made at subsequent stages, and even covers cancer relapse

PREMIUMS

Higher than cancer insurance as they cover specific illnesses

Lower than critical illness insurance as it covers only cancer

Conclusion 

We are all living in difficult times, where unexpected events can impact our lives significantly. The best recourse in such times is to get an adequate financial cover that keeps our families secure and our lifestyle intact. It is thus important for each individual to carefully ascertain which policy will best suit his/her needs and make a decision accordingly.

Naval Goel is the founder of PolicyX.com. He is an Associate Member of the Indian Institute of Insurance`, Pune. He has been authorized by IRDA to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.
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