Is separate Cancer Insurance required if you have a Critical Illness Plan?
In my
article Critical Illness Insurance – A must have we had discussed on the
importance of having a critical illness plan. It provides the financial muscle
needed to fight a critical ailment. Medical advancements have brought about vast
improvements in the treatment capabilities and this has increased the survival
rates for various critical illnesses. However, this does not come cheap. A deep
pocket is essential to have any chance of emerging victorious against a
critical illness. Certain diseases like cancer are cash guzzlers and can gobble
up lakhs of rupees in treatment. Now, many insurance companies have introduced
exclusive cancer insurance plans to take care of this aspect. This gets us to
the question on which is better, an exclusive cancer plan or a critical illness
plan which covers multiple critical illnesses including cancer.
Before we
answer that question, let’s get some insight into the cancer estimates for
India.
Cancer estimates for India
There were 1.45 million new cases of cancer and
7,36,000 deaths in India in 2016, and expected to increase to 1.73 million in
2030, with 8,80,000 deaths by 2020, according to data from the National Cancer
Registry Programme of the Indian Council of Medical Research.*
Further, 68% of Indian cancer patients die, compared
to 33% in the U.S.* This can be attributed to the fact that in many cases the
diagnosis happens at a very advanced stage due to limited diagnostic
capabilities in comparison to developed countries. Even when accurate diagnosis
is made, the prohibitive treatment costs result in many patients dropping out
of treatment or not having the finances to start the treatment.
Cancer treatment costs
Herceptin, a drug used for treating breast cancer
costs around Rs 75,000/- per course, a patient could need upto 17 courses. A
drug called Avastin used to treat colon, kidney and gall bladder cancer can
cost around Rs 8 lakh at around Rs 1 lakh a cycle.# These are just a few of the
costs. Radiotherapy, chemotherapy, medical tests, scans, hospitalization,
surgery costs etc are the other costs. Thus, one may end up spending anywhere
between 5 lakhs to 20 lakhs or more depending on the type, severity of he cancer
and the complexity of treatment. Cancer has the potential to wring out all your
savings and leave you in an abysmal financial state. This is where a cancer
specific insurance plan can come to your rescue.
Some distinguishing features of these plans which set
them apart from critical illness plans are discussed below:
Covers early stage cancer:
Most of us are under the false assumption that if a
critical illness plan covers cancer, it means that just a diagnosis of cancer
is sufficient to claim the sum assured. The truth is that only cancers of
certain severity are covered. The critical illness plans usually have some
cancer-specific exclusions like pre-malignant tumour, non-invasive cancer
(cancer in situ), prostate cancer stage 1 (T1a, 1b, 1c) etc. This is where a
cancer insurance plan scores as it covers most types of cancers, both at an
early and critical stage. Today, better awareness and improved detection
capabilities are making it possible for many cancers to be diagnosed at an
early stage. This improves the survival rate if the correct course of treatment
is taken early on. With a cancer insurance plan, early stage cancers can be claimed and treated effectively.
Continuing plan coverage:
Sometimes, despite the best care and treatment, cancer
recurs or comes back after some period of time. This is called a relapse. In
case of a critical illness plan, only a single claim can be made. Once a
disease is diagnosed and the sum assured is paid the plan ceases. However, in a
cancer insurance plan, a certain % of the sum assured is payable depending on
the stage of the cancer and the plan continues. For eg: Most plans pay 25% of
the sum assured on diagnosis of an early stage cancer and the plan continues
(subject to regular premium payment). Subsequently if the cancer proceeds to a
major stage, the balance 75% of the sum assured is paid. Some insurers pay an additional
50% of the sum assured in case of diagnosis of cancer at a critical stage. Waiver
of premium feature is provided by some insurers where after the initial
diagnosis, premiums are waived for 3-5 policy years.
Survival period is very less
compared to critical illness plans:
Most critical illness plans have a mandatory survival
period of around 30 days after diagnosis of a critical ailment, only after
which a claim can be made. Cancer insurance policies also have a survival
period but it restricted to 7 days usually. Thus, one is able to access the
insurance funds faster and is in a better position to get the best possible
treatment without delay thereby improving the survival rate.
Conclusion:
We are now aware of the gaps which led to insurers
introducing dedicated cancer insurance policies. However, a question still
remains. Should you buy a cancer specific plan or rely on your critical illness
plan. After all, we cannot be sure of which specific ailment can strike us. Despite
the limitations that a critical illness plan has with regards to cancer, it
covers multiple major ailments. To clear the air on this, most industry experts
suggest that an exclusive cancer plan should definitely be considered by those
who are in the high-risk category due to a family history of cancers,
environmental factors such as exposure to radiation, lifestyle (smoking/tobacco
consumption), obesity etc. Also, women are more prone to cancer than men and they
need to give a serious thought on buying cancer insurance. For others, experts opine
that a critical illness plan may augur well.
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