How to pick the right cancer plan

With treatment being very expensive, investing in the right policy will help cushion the financial blow

Cancer not only worsens an individual’s physical health but also impacts the financial condition of the patient. The incidence of this disease is rising rapidly; according to a World Health Organization report, by the end of 2020, every Indian family will have at least one cancer patient.

Cancer is the uncontrolled development of cells and 70-90 per cent of all cancers are related to lifestyle and environmental factors.

Apart from this, there is the extortionate cancer treatment cost that usually goes beyond ₹15-20 lakh.

With such expensive treatment, one must invest in the right cancer insurance plan — either a standalone cancer insurance policy (fixed benefit plan) or an indemnity-based policy. A cancer cover is the best possible way to protect your assets and savings that may get eroded while treating this disease.

Indemnity-based plan

Apart from providing lifelong coverage, the indemnity-based cancer plan has the advantage of an annual renewal even after the claim.

Under this plan, the policyholder gets indemnified against the incurred hospitalisation expenses up to the total sum insured.

These plans pay only the money spent on the treatment within the limits of the SI.

For instance, if you have a plan with ₹15 lakh SI and the total expenses during hospitalisation work out to ₹6 lakh, the insurer will reimburse only ₹6 lakh and the balance will be utilised during hospitalisation within the policy period.

Under indemnity-based plans, you even have the choice of requesting for a second opinion, on first diagnosis of cancer.

The plans cover pre-hospitalisation expenses incurred in the 30 days before the date of hospitalisation, apart from post-hospitalisation expenses incurred during 60 days, post discharge from the hospital.

Fixed benefit plans

The sum assured is paid to the insured on detection of cancer.

Moreover, in most plans, no hospitalisation is required. The cancer insurance plan covers all stages of cancer and provides compensation at every stage.

The plan even offers some additional benefits, including premium waiver benefit on diagnosis of minor stage cancer, multiple unrelated cancers claims and minor life covered.

Apart from paying a fixed lump sum amount to the insured, fixed benefit plans cover non-medical expenses that usually arise due to loss of earnings or livelihood during the treatment and recovery time. For instance, in a cancer-based fixed benefit plan with a SI of ₹15 lakh, if you are diagnosed with cancer within the policy term, the insurer will pay a lump sum of ₹15 lakh as claim payout, regardless of the expenses incurred. After the payout, the policy gets terminated.

Fixed benefit plans generally include products like critical illness plan and personal accident plan.

The writer is Head - Health Insurance, Policybazaar.com

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