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FAQs: Things to Consider Before You Buy Cancer Insurance

Things to consider before you buy Cancer Insurance Plan

Cancer can be life-threatening and those afflicted may also end up emptying their bank account to get treatment for such ailments. However, there is good news – an insurance policy that provides a lump-sum pay out on cancer diagnosis. Commonly known as cancer plans in India, these insurance policies can provide a much needed safety net to secure your finances, if you are diagno

Disclaimer: In Unit Linked Policies, the investment Risk in the investment portfolio is borne by the policyholder.

Written by

Alok Mishra

Insurance Writer

Alok Mishra is a Digital and Content Marketing specialist with 10 years of experience. He has spearheaded Web Content, Social Media & Branding, and Community Building initiatives to drive growth for prominent brands.

Reviewed by

Bhaskar Sinha

Insurance Expert

8+ years of experience in Life Insurance with expertise in Developing Life and Health Products, Digital Sales, Conducting effective trainings and Key Account Management.

1. Do I need a cancer insurance policy?

Anyone can be afflicted by cancer, irrespective of gender, age, occupation, lifestyle, and health condition. Therefore, a cancer insurance plan is highly recommended.

According to the Indian Council of Medical Research (ICMR)1, there would be 17.3 lakh new cases of cancer and over 8.8 lakh cancer deaths by 2020. Any one of us could be diagnosed with this dreaded disease.

2. Is cancer insurance a good idea? I already have a Mediclaim.

You should consider buying a cancer insurance plan even if you have health insurance or a mediclaim. The cancer diagnosis and treatment costs range between Rs. 20 to Rs. 50 lakhs2. Your mediclaim is not enough to cover these astronomical costs.

There may be limitations to the types of cancer and the stages of the disease that the mediclaim covers. A cancer policy covers most forms of cancer, across different stages and severity.

It provides a lump sum amount that covers all costs associated with cancer diagnosis and treatment, including hospitalization, radiation, chemotherapy, and surgery among others. However, there is no death, maturity or surrender benefit payable under cancer plans

3. Are all common forms of cancer covered?

Policies offered by different companies cover different types of cancer. Before investing in cancer policy, it is important to confirm the types of cancer covered by the policy. Some types of cancer can be excluded by the policy, for example:

1. Skin Cancer
2. Cancer directly or indirectly caused or contributed to by sexually transmitted diseases, AIDS, or HIV
3. Any congenital condition
4. Nuclear, biological, or chemical contamination
5. Others

Note the exclusions when you purchase a policy

4. What stages does the cancer plan take into account?

Cancer insurance policy spans across three stages - Carcinoma in Situ (Pre-Cancer), Early Stage and Major Stage. If you are diagnosed in the major stage, you will receive a 100% payout. If you are diagnosed in the pre-cancer stage, a certain percentage of sum assured is paid. This percentage varies from policy to policy

5. Which cancer insurance is the best?

The cancer policy that covers all stages of the disease including the various types certainly merits to be on your consideration list. However, before you buy a cancer insurance plan, it is advised to compare the coverage, cancer insurance premiums, and other features of the plan across different insurers.

Lower premiums might not always be the best for you. If you get more coverage and features, then paying a higher premium is always a prudent move.

Cancer Insurance Plans can cover various stages of cancer. It also offers other benefits like:

1. smokers covered
2. 20% lump sum upfront on detection of early-stage cancer
3. provision for multiple claims for early-stage cancer
4. 100% cover amount payable even during late-stage detection
5. cover of up to Rs. 50 lakhs
6. future premiums waived
7. paperless transaction
8. 10% increase in covers up to 150% of the original amount for every claim-free year

6. How much does cancer insurance cost?

The cancer insurance premiums depend on the sum assured, your age and the features a plan provides. These could include a waiver of premium, income benefit, and indexation of the sum insured.

A cancer policy that provides more benefits may cost a little more, but it deserves to be one of your top choices for a cancer insurance plan. The waiting period, survival period, entry age and maximum policy term are also important considerations before choosing a cancer policy.

Most insurance companies provide an online premium calculator to help you get a quote for cancer plans.

Age at last birthday (in years)	Premiums for Male in (Rs.)	Premiums for Female in (Rs.)
30	15694	20414
40	33512	35341
50	62363	52392

7. Are cancer insurance policies taxable?

Cancer insurance premiums can get you tax benefits under scheme 80D of the Income Tax Act 1961 as per the prevailing tax laws. Deduction for a premium paid towards Cancer insurance Plan, subject to a maximum of Rs. 25,000, for self, spouse, or dependent children, and an additional Rs. 25,000 for parents. For parents who are senior citizens, Rs. 30,000 is the deduction limit.

Insured Type	Age	Deduction Limit
Self, Spouse, Dependent Children	Age of Insured <60	Rs 25,000
Self, Spouse, Dependent Children	Age of Insured >60	Rs 30,000
Parents	Age of Parents <60	Rs 25,000

You will get claim deduction only if the cancer policy premium is paid in any mode other than cash.

8. How to evaluate the insurer?

The reputation of the cancer insurance company is a very important consideration when finalizing your cancer insurance policy. Peruse these parameters, which are an important yardstick to measure the performance of the insurance company:

1. Solvency Ratio

All insurance companies are mandated to maintain the solvency ratio of 1.50 as per mandate from the insurance regulator. It shows that the insurer is capable of paying out policyholder’s claims.

2. Persistency Ratio

Higher ratio indicates greater trust, loyalty and satisfaction among policyholders, and minimal policy lapsation or surrender. Claim paid Ratio (CSR) - It is the number of claims settled by an insurance company as a percentage of numbers of claims received by it, for the given financial year. The higher the CSR, the better the company is at settling claims.

3. Incurred Claim Ratio3 (ICR)

It is the total value of claims paid by the company divided by the total value of premiums collected by the company during a financial year. A higher ICR is always good.

4. Customer Complaints Incidence

Lower complaints against the insurer is a sign of efficiency of the processes involved, quality of the insurance policy, and the reliability of the insurer.

ARN: 05122019/Blog4

Sources:-

1. http://icmr.nic.in/icmrsql/archive/2016/7.pdf

2. https://economictimes.indiatimes.com/wealth/insure/can-you-bear-the-cost-of-cancer-treatment-find-out-how-to-buy-the-best-cover/articleshow/47744432.cms

3. https://economictimes.indiatimes.com/wealth/insure/6-ratios-to-know-when-buying-insurance/articleshow/59297010.cms

^##Save 46,800 on taxes if the insurance premium amount is Rs.1.5 lakh per annum and you are a Regular Individual, Fall under 30% income tax slab having taxable income less than Rs. 50 lakh and Opt for Old tax regime ~# Save 54,600 on taxes if the insurance premium amount is Rs.1.5 lakh per annum for life cover and 25,000 for critical illness cover and you are a Regular Individual, Fall under 30% income tax slab having taxable income less than Rs. 50 lakh and Opt for Old tax regime.

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