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Choose critical illness plans over cancer policies

  • Critical illness insurance plans typically cover 20-30 serious ailments like kidney failure and heart ailments, while cancer policies cover only one
  •  The premium for a cancer policy is much lower than a critical illness policy and these policies give a 20-30% payout in case of early-stage cancer

Cancer is known to be one of the leading cause of mortality, globally. According to data from the National Institute of Cancer Protection and Research (NICPR), 2.25 million people in India are currently living with cancer and each year, about 1.15 million new cases get added to the list. Moreover, the cost of cancer treatment is steep, and is unaffordable for a vast section of people.

While you can make lifestyle changes to avoid things or habits that are known to lead to cancer, you can never be sure if you are doing enough. What you can do, however, is protect your family and yourself financially by taking insurance.

High incidence of cancer

A recent survey by Edelweiss Tokio Life Insurance Co. Ltd, titled The Big C, said incidences of cancer are likely to rise by 23% in the next five years. The survey interviewed 100 oncologists across 15 cities who consult around 406 patients in a month.

Cancer can be detected at the early, locally advanced or metastatic stages. The Edelweiss Tokio Life report said that most cases are detected at the locally advanced stage which essentially is the stage two or three of cancer. “Non-specific symptoms in initial stages of most cancers often lead to late diagnosis by which time the cancer usually has progressed to an advanced stage. Lack of awareness of the warning signs, poor health-seeking behaviour of individuals and high cost of diagnostic tests are other reasons," said Ravi Mehrotra, director, department of health, ICMR-NICPR, and researcher, ministry of health and family welfare, government of India.

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High cost of treatment

Though there have been significant medical advancements over the years and most oncologists agree that survival rate post one year of late-stage cancer has improved, the problem of unaffordability persists. Of the oncologists surveyed by Edelweiss Tokio Life, 92% believe that a majority of patients discontinue treatment due to high treatment costs. About 25% patients in early stages of cancer discontinue the treatment due to high costs; 33% patients at the metastatic stage drop out due to unaffordable costs.

“Cost-intensive drug development resulting in higher costs of available chemotherapy drugs as well as other modalities of treatment, including surgery and radiation, are the main reasons for unaffordability of cancer treatment. Limited public healthcare facilities providing cancer treatment are also responsible for this," said Mehrotra.

Cancer insurance

One way to deal with the high costs is taking insurance. Cancer-specific policies are designed to help mitigate risks associated only with cancer. They are defined benefit plans and generally give out a lump sum once you’re diagnosed with cancer. “Most insurers give a lump-sum benefit after the diagnosis. Some policies operate like an indemnity plan which work like regular health insurance policies," said Abhishek Bondia, principal officer and managing director, SecureNow.in, an insurance intermediary.

“The benefit of having an indemnity cancer plan is that it covers you for the expenses after you’re diagnosed and the policy can also be continued lifelong. The likelihood of a relapse is quite high, so an indemnity policy helps," he added.

The premium for a cancer policy is much lower than a critical illness policy and these policies give a 20-30% payout in case of early-stage cancer, unlike a critical illness policy, which covers you only for advanced stage of cancer treatment. In case of advanced-stage diagnosis, cancer policies pay out 100% of the sum assured.

Should you buy one?

It could get overwhelming to understand what you should buy, given the choices in the insurance industry. But experts say the first plan you must go for is a regular health insurance plan with adequate sum assured.

After buying that, consider a critical illness plan which gives high coverage and isn’t restricted to one particular illness, unlike a cancer-specific policy that covers only cancer. Critical illness policies cover 30-35 illnesses. “A cancer plan is more relevant if you have a family history. If not, it is better to first buy a critical illness plan. Regular health plans also cover cancer, so the principal advantages with an indemnity cancer plan is that OPD expenses are covered and a sum assured is set aside for cancer," said Bondia.

If you already have a regular health plan in place, buy a critical illness or cancer policy, according to your needs.

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