Product Review. A cover for critical ailments

ICICI Prudential Life has launched a health plan which covers heart ailments and cancer. Policies such as these that are targeted at specific ailments give a comprehensive life coverage. They cannot be compared with medi-claim (or hospitalisation) policies from a general or a health insurer.

The advantage is that the sum assured is paid lumpsum on diagnosis of the illness and is not restricted to in-patient treatment in hospitals.

Critical illness (CI) policies from general insurers too promise lumpsum payment at the time of the first diagnosis of the disease, but the drawback is that they do not cover early stage cancers and minor heart conditions that require angioplasty. The other disadvantage is that in CI policies, there is always a condition that the patient should survive at least 30 days from the diagnosis of the disease for the insurer to pay for the claim.

With increasing lifestyle disorders, it makes sense to buy a policy with a comprehensive coverage so that you are not financially stressed out when you have to pay for the treatment.

ICICI Pru Heart/Cancer Protect covers individuals of 18-65 years and allows renewal till 75 years. However, the maximum policy term allowed is only 40 years.

Individuals who have been receiving treatment for any heart ailment or cancer in the preceding 48 months of buying the policy will not be covered under this plan. But others can sign up without a medical check-up. The initial waiting period is six months.

If the ailment is diagnosed in the early stage, the policy will pay 25 per cent of sum assured and waive all future premiums, though the risk cover will continue. The balance sum assured will be paid whenever there is next claim for a minor or major condition in a new or already existing ailment.

In the case of cancer, there is no minimum survival period. In heart ailments, however, there is a condition that the policyholder has to survive for at least seven days after the diagnosis of the ailment for the claim to be accepted.

The policy offers three benefits as add-on benefits for additional premium. One, there is a no-claim benefit which can take care of inflation in medical costs. The sum assured under the policy increases by 10 per cent every year of no-claim up to 200 per cent of the cover chosen at inception.

The cover keeps rising till the first claim is made. The second is the ‘hospital cash’ benefit, where for every day of hospitalisation, the insurer will give ₹5000.

The third is income benefit, where the policy tries to substitute for loss in income after you are diagnosed with a major heart ailment/cancer and cannot do your regular job. The income benefit is 1 per cent of sum assured and is given every month for five years.

The one other player in the market who combines heart care and cancer is PNB Met Life. It has a product called Mera Heart and Cancer Care. ICICI Pru Heart/Cancer Protect is a better plan as it waives off premium for the rest of the policy term once an initial stage claim under cancer or a heart ailment is filed. PNB Met Life’s product waives premiums only for the first five policy years in such a case. However, note that in PNB Met Life’s plan, there is an inbuilt term insurance cover too. The sum assured under the policy will be paid even if the individual dies due to reasons other than the ailments covered under the policy.

A 35 year-old female will get a maximum 40- year term policy with ICICI Pru Heart/Cancer Protect. If she takes a ₹20 lakh sum assured policy, with ICICI Pru, the premium would be ₹5,819 (for the base plan).

But, if she opts to go with PNB Met Life’s Mera Heart and Cancer Care, the maximum term that she will get is only 20 years and the premium would be ₹10,332 (base plan). The premium is higher because of in-built term cover. But if you are young and buying the policy when you are 35/40 years old, you can’t renew the cover after 55/60 years, which is actually the time you will need the cover.

There are many standalone cancer policies in the market; popular among them are— Max Life’s Cancer Insurance Plan, Aegon Life’s iCancer and HDFC Life’s Cancer Care. But all these plans offer a maximum sum assured of only ₹40-50 lakh. ICICI Pru Heart/Cancer Protect offers cover up to ₹75 lakh (you can opt to take cover for cancer alone for ₹75 lakh and not opt for a cover for heart ailments). Also, while in MAX Life’s Cancer Insurance Plan, the entry age is 25, in ICICI Pru Heart/Cancer Protect, it is 18 years. The disadvantage with HDFC Life’s Cancer Care is that the maximum term is only 20 years, though the maximum maturity age is 75 years. In ICICI Pru’s and Max Life’s cancer policy, the maximum term offered is 40 years and the maturity age is 75 years.

If you are looking for a cancer policy, consider either Max Life’s Cancer Plan or ICICI Pru Heart/Cancer Protect. Both of them are similar on most parameters.

In PNB Met Life’s plan and HDFC Life’s plan, the premium waiver after diagnosis of an illness in its initial stage is limited to three-five years. Whereas, in Max Life’s and ICICI Pru’s plan, premiums are waived till the end of the policy term.

For a 35-year female a policy under Max Life’s Cancer Insurance Plan where the NCB benefit (goes up to 150 per cent of sum assured) is in-built in the policy, the premium works out to ₹11,454. If she wishes to take a cancer cover for ₹20 lakh, the premium in ICICI Pru Heart/Cancer Protect for a 40-year term, assuming she also opts for the no-claim benefit, comes to ₹13,722.

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