Lung Cancer: What Your Health Insurance Really Covers, And What It Doesn’t

On World Lung Cancer Awareness Day, it is worth pausing to look beyond diagnosis and focus on something just as crucial: how to pay for treatment. Lung cancer continues to be one of the deadliest cancers in India, and while medical advancements like immunotherapy have brought hope, they have also brought rising costs. The big question is: Does your health insurance policy truly have your back?

Hospitalisation is Covered, but that’s Just the Start

The first question any policyholder would ask is this: Does my standard health insurance policy cover lung cancer?

The answer is yes, most standard health insurance plans in India do cover lung cancer treatment which typically includes chemotherapy, radiotherapy, and surgery. Immunotherapy, the newer line of treatment, is often included too, but with caveats.

Policies may cover immunotherapy under “modern treatments,” but it is common for insurers to apply sub-limits. That means even if your policy says immunotherapy is covered, the actual amount reimbursed might be far less than what you will pay out-of-pocket. “Advanced treatments such as immunotherapy are covered under technological advancements; however, sub-limits may be applied depending on the policy terms,” says Priya Deshmukh, Head, Health Products, Operations and Services, ICICI Lombard.

This is where comprehensive health insurance plans come into play. These offer broader coverage, often with higher room rent limits and fewer caps on modern procedures. But even these are not uniform; policy wording matters a lot.

Ashish Yadav, Head of Products and Operations, ManipalCigna Health Insurance, explains that while standard plans generally cover hospitalisation for treatments like chemotherapy and radiotherapy, “newer and expensive treatments such as immunotherapy may not always be included or may have sub-limits.” According to him, it’s critical for policyholders to review inclusions, exclusions, and fine print to ensure their policy aligns with actual treatment needs.

Smokers, Read the Fine Print

Insurance companies do take lifestyle into account. Smokers may face higher premiums, and some policies impose specific exclusions if lung cancer is linked to smoking or undisclosed pulmonary conditions. “Health insurance companies may load up the premiums for smokers due to their high risk of developing lung cancer,” says G. Srinivasan, MD and CEO of Galaxy Health Insurance.

More importantly, if you have had any history of respiratory disease or smoking, failure to disclose it can lead to claim rejection later. As Srinivasan puts it, “Concealing your medical background or smoking habits can result in policy cancellation or denial of claim.”

Pre-existing lung conditions, if disclosed, typically carry a waiting period, often up to 36 months. So if you already have breathing issues, it is better not to expect instant coverage. A standard waiting period of 30 to 90 days also applies to new policyholders.

Yadav adds that most plans exclude pre-existing conditions, including lung cancer, for a period of 2 to 3 years, and for smokers, higher premiums or restricted benefits are possible. “Declaration at the time of application is important to avoid future claim rejections,” he says.

Critical Illness Plans and their Lung Cancer Coverage

Many people confuse hospitalisation coverage with the lump-sum benefit offered under critical illness (CI) policies. CI plans work differently: they pay a one-time fixed amount if you are diagnosed with an illness that meets their definition and severity criteria.

Yadav notes that most CI plans define lung cancer as a malignant tumour that must be confirmed through histology, with coverage triggered only after the cancer reaches a defined stage. Early-stage, localised, or pre-malignant cases may not qualify for any payout. Critical Illness policies define lung cancer as a malignant tumour marked by uncontrolled cell growth and destruction of tissues. Coverage is generally for invasive and life-threatening stages,” Deshmukh explains.

There are other things to note: CI policies often come with a survival clause. You must survive for a certain number of days, usually 14 to 30, after diagnosis to be eligible for the benefit. There’s also an initial waiting period of 60 to 180 days after buying the policy.

Also, that lump sum is all you get. The policy does not reimburse you for surgery, follow-up scans, or chemotherapy. So if you think this payout will carry you through the entire treatment process, be cautious.

Cancer-Specific Plans: Are They Better?

Standalone cancer insurance plans are increasingly being pitched as an affordable way to plug the gaps. These often provide stage-wise benefits, cover expensive therapies like immunotherapy more comprehensively, and may even offer monthly payouts during treatment.

But they don’t cover other illnesses. And while critical illness add-ons provide broader protection across diseases, they tend to have stricter criteria and less nuanced cancer coverage.

“The optimal strategy is a layered one,” says Srinivasan. “Use a comprehensive health insurance policy as your base, then add a CI rider or a cancer-specific plan depending on your health history and risk factors.”

Yadav echoes this view, suggesting that while cancer-specific plans offer tailored coverage including benefits for all stages and potential monthly income support, they should ideally complement rather than replace comprehensive or critical illness plans. “A layered approach ensures the best risk coverage,” he says.

Common Pitfalls to Avoid

According to experts, the most frequent mistakes people make with cancer coverage are surprisingly basic:

• Choose a policy only because it’s cheap without reading the fine print. Says Srinivasan, “Many people choose a plan based on low premiums or attractive offers without considering whether the policy sufficiently covers their specific healthcare needs, including pre-existing conditions and potential future healthcare requirements.”

• Overlooking co-pay clauses or room rent sub-limits

• Not declaring smoking habits or previous respiratory issues

• Assuming all cancer stages are covered

• Confusing hospital expense coverage with critical illness payouts

“Policyholders often confuse basic hospitalisation coverage with lump-sum CI benefits,” says Yadav. “Overlooking waiting and survival periods, or misunderstanding sub-limits and exclusions are common reasons for claim denial.”

Bottom Line

Lung cancer treatment is expensive, and insurance can be a financial lifesaver, but only if the policy aligns with your actual risks and needs. On World Lung Cancer Awareness Day, you can take a moment to re-read the policy fine print or speak to the insurer if needed, and make sure you understand the coverage - from what is included and what is not.