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Health insurance and cancer: Everything you need to know about policies

The coverage under a critical illness plan is available only to those who are not yet diagnosed with cancer.

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Sunainaa Chadha New Delhi
Priya,  59 was diagnosed with breast cancer in January 2022. She had a standard health insurance policy from Oriental, which only covered hospitalisation expenses. She had no add on options like critical illness or cancer cover with this policy,  which means she had to bear the entire costs of medical tests, chemotherapy, doctor consulting charges, medicines all by herself. 

Even though she had purchased the Health Shield policy from ICICI Lombard in December 2021 as a safety net,  the policy had a clause that for the first 24 months the waiting period forfor specific Illness and treatment ( it included cancer), would be 24 months. This meant that for cancer treatment in 2022, she could not have made any claims. 

A single biopsy test at Gangaram Hospital in New Delhi set her back by Rs 32,000, while on single chemotherapy session was Rs 70,000. She kept all her bills and reports, but her claims were rejected because these weren't hospitalisation charges. In one short, Aarti who is now dependent on her daughters for income had to shell out more than Rs 1 lakh. She soon realised that cancer treament is an expensive affair, and despite having paid premiums all these years, her policy would not bear any of the pre-hospitalisaion expenses.  She had two options: To take a loan or somehow get admitted into AIIMS, where cancer treatment is heavily subsidised. 

By pulling some strings, Priya managed to get into the Indian Rotary Cancer Institute, (AIIMS), where she could finally afford the treatment. 

If you have survived cancer, no policy purchase now will cover it

If you are already a cancer patient, and trying to buy a medical insurance policy you will be denied health coverage not just for cancer but also for any complications arising due to cancer. The coverage under a critical illness plan is available only to those who are not yet diagnosed with cancer. 

Get a critical illness insurance policy
It is a common assumption that a comprehensive health insurance policy will be sufficient when it comes to covering the cost of cancer treatment. 

While health insurance covers only hospitalisation expenses for serious ailments, critical illness benefit is a lump-sum amount you get on being diagnosed with a life-threatening condition. The funds from critical illness insurance can be used in any way you need. It can be used to cover your lost income, to cover the cost of rehabilitation (if any), and other miscellaneous expenses
 

Most critical illness insurance plans rovide coverage after a waiting period of 90 days. If any symptom relevant to cancer occurs within 90 days of the commencement of the policy, no coverage will be offered. 

The benefit amount is payable once the disease is diagnosed, meeting specific criteria, and the insured survives a minimum number of day,  which is the survival period from when the illness was first diagnosed. The survival period defined varies from company to company; however, 14 days is the most typical survival period used.

Even if you are diagnosed after this waiting period is over, your insurer will not pay the claim amount until your cancer is in the advanced stage. This is because critical illness plans do not cover cancer in an early stage.

You can also purchase specific cancer insurance policies

 
On the other hand, there are also specific cancer insurance policies which are  designed to provide medical coverage and meet the specific insurance needs of a cancer patient. A cancer care policy ideally covers you against cancer - both at early and advanced stages.

Standard health insurance covers hospitalisation costs, but cancer treatment is not just restricted to the hospital. Both treatment and rehabilitation can be expensive and long drawn, causing a loss of income. Cancer insurance, in such cases, acts as a savings plan as you can use the coverage amount instead of touching your savings.

Just like a critical illness insurance plan, most cancer insurance plans also do not offer coverage to patients who have a pre-existing cancer condition. However, a couple of cancer-specific plans also cover existing cancer patients after a small waiting period.

Cancer insurance is typically purchased before a cancer diagnosis, as it is intended to provide financial support in the event of a future diagnosis.

"If you  already have an existing health insurance policy and if the Cancer is diagnosed during the policy duration, then the cost of treatment of Cancer will be covered as it was not pre-existing and was diagnosed /detected only after the policy inception.

However, if the customer already suffers from Cancer, then it is considered a pre-existing disease which is usually an exclusion under most health insurance policies," said Bhaskar Nerurkar, Head – Health Administration Team, Bajaj Allianz General Insurance. 

How to decide between critical illness cover and specific cancer policy?

Most experts advice people to opt for the critical illness and cancer insurance as supplemental coverages along with your standard health insurance plan. The main difference between cancer and critical illness insurance is that a critical illness benefit is a lump-sum amount to cover a host of serious ailments. On the other hand, cancer insurance covers all the costs directly and indirectly associated with treating all types of cancer. Cancer is usually covered in most critical illness plans, but these plans may not cover all types of cancer at different stages. A cancer insurance plan, on the other hand, is specially designed to cover the perils of being diagnosed with cancer.


Most retail insurance plans reject cancer survivors
"Most retail insurance plans outright reject cancer survivors. However, cancer survivors may be able to get covered through a retail plan with permanent exclusion for cancer related co- morbidities. There are certain plans available that also covers cancer survivors through lumpsum covers for relapse. The pricing for these plans are on par with other retail customers. In certain cases there maybe additional premium loading done at the insurer’s end," said Anuj Parekh, CEO and Co-Founder of Healthysure.
 
Generally, it would be easier for a person diagnosed at an early stage of cancer to get health insurance whereas someone at a terminal stage will not get it. "

It is always recommended to purchase health insurance when you are fit and fine. If you buy health insurance at a young age, you can get up to Rs 1 crore sum insured at an affordable price," said Siddharth Singhal, Business Head - Health Insurance, Policybazaar.com.

If you have an existing policy, treatment is covered

If the Cancer was diagnosed /detected after the policy inception, the cancer treatment will get covered within the policy, and the medical expenses related to cancer will also be payable within the policy period. Also, post treatment, if the cancer resurfaces within the policy period, then the medical expenses related to the same will be covered.

Bajaj's Nerukar explains this with an example:  Policy Period is: 1-01-2023 to 31-12-2023, and the first time cancer got detected in March 2023 and got cured, and the last treatment was done by September 2023, but then by November 2023, the Cancer was detected again, then the expenses shall be payable even for the recurrence within the policy period. In some of the products additional Sum Assured is triggered to benefit the customer if s/he is detected with such critical illness.

Even relapse is covered

If you are diagnosed with cancer while already having a health insurance policy, your treatment expenses will be covered by your policy. Even if you recover from cancer and it relapses later, you will be eligible for a claim. If you have restoration benefits in your health insurance, your claim amount will be restored up to the maximum limit after it gets exhausted.

"It is recommended to choose a plan with unlimited restoration benefits up to the sum insured. For example, if you have a health insurance policy with a sum insured of Rs 10 lakh and you make a claim of Rs 8 lakh for cancer treatment, you can still make another claim of  Rs 9 lakh within the same policy year if your policy has an unlimited restoration feature. It's an important feature to consider when looking for a health insurance policy, even for those who are healthy," said Singhal. 

But are all cancer-related expenses covered? 

It is important to check whether pre and post-hospitalisation expenses are covered by the policy.OPD makes up a significant portion of expenses for cancer patients. Additionally, an OPD cover that pays for doctor consultations, pharmacy, and diagnostic tests is recommended to cover expenses outside of hospital visits.  Here,  a specific cancer policy has certain advantages such as :

Coverage for expenses related to cancer treatment, including chemotherapy, radiation therapy, and surgery 
Coverage for hospitalisation and medical tests 
Income replacement or disability coverage to help cover lost income during treatment and recovery 
Access to counselling services or support groups for emotional support 
Lump-sum payment for early detection of cancer 
Option to choose a higher sum assured for more extensive coverage 

ICICI Lombard gives this example to understand how cancer policy works. Mr A, a 30-year-old working professional, purchases a cancer insurance policy for a 20-year term with a sum insured of Rs 10,00,000. At 40 years of age, he gets diagnosed with the first cancer stage. In this scenario, the insurer will pay 25% of the sum insured, which amounts to Rs 2,50,000. As a result, the coverage under the policy will reduce to Rs 7,50,000.

After seven years, Mr A's cancer progresses to a severe stage. At this point, the insurer will pay the remaining sum insured amount of Rs 7,50,000, and the policy will terminate. It's important to note that the payout from the plan is made based on the stage of cancer diagnosed.

Once the policyholder receives the lump sum payment, the person can use it to cover any expenses related to the cancer diagnosis, including medical bills and treatment expenses, and to replace lost income.  

Cancer policies usually have a continuing benefits:Even if the policyholder is diagnosed with cancer several times, the policy will continue offering coverage without interruption.




 
 

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First Published: Aug 18 2023 | 9:46 AM IST

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