When buying cancer cover, look for a policy that pays even at early stage

Make sure that the payout is not restricted to detection at stage III or IV

Among non-communicable diseases, cancer is a leading cause of deaths in India. This National Cancer Awaren­ess Day let us discuss how insurance can help you handle the financial devastation caused by this disease.

When cancer is detected, a person has to incur hospitalisation expenses. But a considerable part of treatment also happens in the form of daycare (chemotherapy, for instance, may not require hospitalisation). Treatment also tends to be prolonged and the patient is unable to earn during this period.

To meet these issues, you need multiple covers. First, buy an indemnity plan. “Your first should be a comprehensive health cover—an indemnity-based plan that will reimburse your hospitalisation expenses,” says Mayank Bathwal, chief executive officer, Aditya Birla Health Insurance. Thereafter, buy a fixed-benefit plan, which will pay a lump sum on the detection of the disease, help you meet the myriad expenses beyond hospitalisation that arise, and compensate you for loss of income. “Your hospitalisation cover should be for at least Rs 10 lakh per person, but go higher if you can,” says Amit Chhabra, head-health business, PolicyBazaar.

The fixed benefit plan you buy can be either a critical illness cover or a cancer-specific policy. “It is advisable to buy a critical illness cover—one that covers you for a wide range of ailments. But if you can’t afford one, opt for a disease-specific cover, like cancer cover,” says Bathwal. Adds Renu Maheshwari, Sebi-registered investment advisor, and co-founder and principal advisor, Finscholarz Wealth Managers: “If you have family history, your lifestyle or occupation puts you at high risk, or you are worried about contracting this disease, buy a cancer-specific cover as well.” Since it is a single-disease cover, it is cheaper than either a hospitalisation cover or a critical illness cover.

Cancer covers are available from both life and general insurers. “The cover from a life insurer will be for a specified period, say, 20-25 years. Make sure you are covered for the longest possible period. Policies from general or health insurers are rene­wed every year for the entire lifespan,” says Naval Goel, chief executive officer (CEO), PolicyX.com. Another difference is that the premium of a policy from a life insurer remains constant throughout its tenor. A general/health insurer’s premium will be lower when you are younger and increase as you age. Over a lifetime, however, their costs may not be very different, say experts.

Some insurers have launched indemnity-based cancer covers. These may not be very useful since your indemnity costs would be covered by your basic hospitalisation cover. So, go for a fixed-benefit cover. “Make sure the sum insured of the cancer cover is high — around Rs 50 lakh,” says Goel. Maheshwari suggests the policy should come with premium waiver option.  

Bear in mind that the amount you get paid depends on the stage at which cancer is detected. 

“Somebody whose cancer is detected at stage II gets a lower payout than someone whose cancer is detected later,” says Chhabra. Buy a policy that makes a payout irrespective of the stage of detection. “Your policy should make a payout even if the disease is detected at stage I. And the payout should be substantial even at an early stage,” says Chhabra.