Comprehensive Buying Guide by Consumer VOICE experts to help you finalize Cancer Insurance Plans
Q1. Why buy a cancer insurance policy in the first place?
The following factors may have a role:
- The existing health 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).
- Once a person is diagnosed with cancer, there are insurance policies that cover treatment only in advanced stages of the ailment.
- 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.
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.
As of now, only five life insurance companies offer cancer insurance 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 compared here to know the best cancer insurance plan.
Q2. How are the payouts done or claims paid in case of a person is afflicted with Cancer?
- All policies offer lump-sum payouts once the policyholder is afflicted with the disease.
- 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. Read more.
- 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.
- 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.
- There is no death benefit. If a patient dies within the waiting period, 100 per cent of the premium is refunded to the family.
- 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.
- While some plans offer waiver of future payouts of premium (also called waiver), some offer death benefit to the nominee.
- 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).
- Once a lump-sum payment has been made for treatment (for any stage of cancer), the policy gets extinguished.
- 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.
- 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.
- The maximum entry age under this plan is 65 years.
Check what all is included in the only 5 available cancer insurance plans here.
Q3. What is not included in the Cancer insurance policy or what are the exclusions of a cancer insurance plan?
- Sexually transmitted diseases (STD), AIDS or HIV
- Any preexisting condition c) Any congenital condition
- Any critical illness or its signs or symptoms having occurred within the waiting period of 180 days from policy commencement
- Complications arising due to the influence of narcotic drugs, alcohol or other such psychotropic substance not prescribed by the treating doctor
- 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
- Unreasonable failure to seek or follow medical advice, or delayed medical treatment in order to circumvent the waiting period or other conditions
Check what is excluded from the only 5 available cancer insurance plans here.
Q4. What are the Tax Benefits of Cancer Policy?
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.
Takeaways for Consumers
- 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).
- Go for maximum sum assured with minimum exclusions and maximum inclusions.