With Cancer Cases Up, It’s Time To Augment Your Health Coverage

Covering Cancer

Standalone cancer insurance pays both for treatment and offers a lump sum at various cancer stages. It’s affordable and targeted.

Comprehensive health insurance handles hospital bills, but falls short on non-medical costs or income support.

Critical illness policies cover major illnesses, including cancer. Some may exclude early stage cancers

Critical illness riders with term plans are low-cost add-ons that offer partial payouts, but come with coverage limits and conditions.

India is referred to as the cancer capital of the world due to the high number of cancer cases in the country. Cancer cases are expected to reach 1.5 million by 2025, according to a report released on August 18, 2020 by the Indian Council of Medical Research (ICMR) and the National Centre for Disease Informatics & Research (NCDIR). This represents a 12 per cent increase from the figures for 2020.

With this distressing rate of growth in cancer among people, it makes sense to have adequate insurance coverage against cancer. The disease can be devastating not just for the patient, but also for the entire family. There have been cases where families have been driven to penury during the course of cancer treatment for a family member.

With medical costs increasing over time, it has become more critical than ever to secure ourselves with health insurance to access quality healthcare when needed. “The situation becomes even more challenging in the case of critical illnesses or life-threatening diseases, such as cancer or kidney failure. So, staying financially protected is of utmost importance,” says Bhaskar Nerurkar, head-health administration team, Bajaj Allianz General Insurance.

The First Line Of Defence: Comprehensive Health Policy

Buy a comprehensive health insurance plan to cover various health conditions, including cancer. This can form the base for the financial war that you would face upon detection of a disease like cancer.

When doing this, you need to keep two things in mind. First, the coverage should be adequate, and second, if the cancer condition is accepted under a comprehensive health insurance policy, coverage is provided for inpatient treatment (IPD) up to the sum insured, subject to the initial waiting period and policy terms and conditions.

Says Siddharth Singhal, head, health insurance, Policybazaar, an insurance aggregator: “Chemotherapy is typically covered under day care treatments, which are included by default in all comprehensive health insurance plans. If the policy includes an OPD (out-patient department) add-on, then cancer-related consultations, diagnostics, or medications availed on an outpatient basis may also be covered, after applicable waiting periods and depending on the terms and conditions.”

If you don’t have an OPD add-on, you will have to bear the cost of follow-up visits, blood tests, prescription medications, and others. Thus, one should read the policy terms carefully to understand the eligibility conditions, the extent of coverage, and any sub-limits.

In short, a comprehensive health insurance policy may still leave you with out-of-pocket expenses, if you are not careful enough.

The Second Line Of Defence: Specific Covers

Cancer Insurance: There are specific cancer insurance products that are particularly relevant for individuals with a family history of cancer and those looking for higher coverage at a lower premium. But they stand apart because you can opt for lump sum payments.

“Cancer plans provide both indemnity cover (hospitalisation expenses), and lump sum benefit payouts at different stages of cancer (early, major, critical),” says Surinder Bhagat, head, employee benefits, large account practices, Prudent Insurance Brokers.

Remember that treatment costs are quite high. Says Bhagat: “Some cancer treatments can cost Rs 40-50 lakh or more, and specialised cancer plans often offer a higher sum insured at a lower premium than standard health insurance.”

While treatment costs are high, one may also face temporary or permanent loss of earnings during the course of the treatment. These plans also cover loss of income, while receiving diagnosis and treatment, and that may come in handy. These plans are likely to help cushion your finances during a rough time as against a typical health insurance, which only covers medical expenses related to the treatment. The lump sum benefit can be used at the policyholder’s discretion to cover the cost of a rich diet, which cancer patients need, and a caregiver.

Critical Illness Policy: A critical illness (CI) policy may be suitable for broader coverage, as it provides a lump sum payout for multiple severe illnesses, including cancer.

You must consider the sum insured, waiting period, coverage scope, and understand the claim settlement process before buying.

Says Nerurkar: “Opt for a policy that gives the freedom to choose a substantial sum insured to cover medical expenses. Understand that some policies have a specific waiting period before a claim can be made for certain illnesses. Be aware of these waiting periods.”

After considering these factors, it is crucial to review the ease of the claim settlement process of the insurer you are choosing. Check if the insurer provides lifelong renewability to ensure long-term coverage. Check the conditions that are covered under the plan and if they are relevant to your health risks.

For CI policies, insurers may have age restrictions; so, choose one that seems best suited to your current or future needs. Says Nerukar: “Review the policy document to check if any exclusions might affect your coverage. It is also essential to review your insurer’s claim settlement ratio. A high claim settlement ratio indicates reliability. Look for a cover that provides compensation for lost income due to critical illness, as it will ensure financial stability during the recovery period.”

However, such plans cover cancers of specified severity identified by pre-defined markers. Not all early cancer detections may be covered.

Third Line Of Defence: CI Riders

It is also possible to buy a CI plan as a rider to a term insurance plan. In this case, on diagnosis, you get a lump sum from the death benefit, which is deducted from the final payment. Says Hari Radhakrishnan, expert, Insurance Brokers Association Of India (IBAI): “Typically, such riders cover major-stage cancers; early-stage cancers may be excluded or limited. Survival or waiting period applies, often 14 to 90-180 days after diagnosis before the claim becomes eligible. Once paid out, the amount reduces the death benefit but the term plan usually remains in force.”

However, these bundled plans will increase your premium. It makes sense to compare the premium in view of the coverage with a specific cancer or CI plan. Most riders have narrow coverage (mostly major-stage cancers), and limited payout amount (capped by rider sum, which could be much less than standalone plans). Also, it’s tied strictly to the term plan’s validity.

“While they provide an additional layer of coverage, the payout may not always be enough to cover extended treatment and recovery costs. It may be sensible to use both. A standalone cancer plan provides a more targeted and in-depth coverage,” says Kunal Varma, founder and CEO, Freo, a consumer digital banking platform.

What Should You Do?

It is advisable to have a critical illness cover as it covers a range of diseases whose treatment may otherwise burn a hole in your pocket. Those with family history must have a cancer insurance as well.

Cancer and critical illness insurance plans cover a range of costs, including treatment such as hospitalisation, radiation, chemotherapy, surgery, and more. “With adequate coverage, one need not worry about the potential financial burden that many critical illnesses can bring. In some cancer insurance plans, the payout is based on the severity of the disease and is paid out in a lump sum. This depends on the terms of your insurer,” adds Nerukar.

Opt for a policy that offers the lump sum payment option because it can help you ride through a tough time. It’s possible that the patient is not in the condition to work anymore. Even a family member may find it difficult to juggle a full-time job and the needs of a cancer patient, who need to be in a detailed care routine during the treatment. So, it will be essential to hire a caregiver.

Having a comprehensive cover or a CI rider with a term plan may make sense to layer the protection, but mind their limitations.

Crossed 40? You Are Vulnerable

The highest cases of cancers were reported in the age group of 40-64 years of age, according to an Indian Council of Medical Research report released in December 2022. In the above age group, lung cancer was the most common cancer among males, while breast cancer topped females in all age groups, added the report.

So if you are above the age of 40, you need to prioritise protection against cancer.

To start with, get a suitable health insurance policy that provides comprehensive coverage, considering both present and future requirements. Says Kunal Varma, founder and CEO, Freo, a consumer digital banking platform. “It’s a good idea to review your health insurance at age 40 to ensure you have adequate cover. At the very least, you should have a cover of Rs 10-15 lakh.”

For additional coverage to stay protected against cancer, it is essential to consider critical illness insurance or, more specifically, a cancer policy.

Things To Keep In Mind

• Look for a policy with a shorter waiting period and wide coverage to ensure you can use them when required

• Go for a policy which gives you the option of lump sum payments, in case you need additional support during the period

• Buy cancer insurance if you have a family history

• Buy critical illness plan for a range of serious diseases, including cancer

• In all this, do not forget to buy a comprehensive health insurance, which covers cancer among other illnesses

• Remember to check if it covers OPD expenses, otherwise take an OPD add-on to your health insurance

• A critical illness rider with term insurance plan can be added, but know that it comes with limitations and conditions

• Read the terms and conditions, and understand the claim settlement process clearly before buying any health insurance policy

meghna@outlookindia.com