While buying a health insurance policy for protection against cancer here are the main factors you should consider. Health insurers can no longer charge more or deny insurance coverage to you or your child because of a pre-existing health condition like asthma, diabetes, or cancer. They cannot limit benefits for that condition either. Once you have insurance, they can’t refuse to cover treatment for your pre-existing condition.
Many critical illness insurance plans which are also defined benefit plans also cover various types of cancers. However, a cancer special plan may have the edge here.
A cancer care policy is designed to specifically address the medical requirements related to cancer treatment only, whereas a critical illness plan with cancer coverage caters to listed chronic conditions and critical illnesses, cancer being one of them.
How do the cancer plans work?
There are many comprehensive standard health insurance plans that cover a wide range of diseases including cancer. These plans are indemnity plans which pay for the actual treatment cost within the overall limit of the sun insured.
If you have a comprehensive plan you need to check it thoroughly to understand the level of financial protection it offers against cancer.
When it comes cancer special plans, then most of these plans are defined benefit plans. Most cancer protection policies offer defined benefit plans where a fixed benefit is payable to policyholder in case he/she is diagnosed with any of the specified early or major stage cancer during the policy term.
A cancer special plan would consider and cover various aspects of cancer treatments in depth as compared to a critical illness policy. For example, cancer care special plans cover early to advanced stages of cancer, while a critical illness plan might restrict coverage to advanced stage alone.
Many people pay extra money each month, on top of their regular health insurance payment, so they can get special insurance that covers them in case they get cancer.
If you have health insurance, you don’t need to buy cancer insurance. Your current health insurance more than likely covers cancer!
The National Cancer Institute calculated the average cost of medical care and drugs tops $42,000 in the year following a cancer diagnosis. Some treatments can exceed $1 million. Usually, most costs are covered.
A cancer insurance policy is an policy that pays a lump sum if the policy holder is diagnosed with cancer. These plans have payouts that typically range from $5,000 to $200,000 (plans with higher payouts have higher premiums).
Treating and managing most cancers costs a lot of money. Some insurance plans offer supplemental coverage called catastrophic coverage. These plans do NOT cover routine medical expenses, but may only help cover worst-case health scenarios, such as having a serious illness or injury.
Even if the provider is in-network, your cancer treatment may nonetheless be denied if it is deemed to be “experimental” or not “medically necessary.”
Health insurance Benefit vs indemnity
There are two kinds of policies available in the market. Benefit policies are those where sum insured is paid upon the discovery of cancer and successfully passing the survival period. In an indemnity policy, the claims are payable after the waiting period is over and are reimbursed in accordance with the amount spent towards cancer treatment charges (see Insurance Claims Management).
Sufficient insurance coverage amount
It is no secret that cancer treatment is extremely expensive and a long-term ordeal. The cumulative cost incurred on diagnostics, radiation, chemotherapy and surgery would cause a significant dip in your personal savings if they were to be borne out-of-pocket.
Going by the age-old adage, “Better to be safe than sorry”, it would be more beneficial if one were to opt for a higher sum insured amount that would take care of high-cost procedures for a slightly higher premium.
Prior history of cancer
People who have been diagnosed with and treated for cancer earlier should be prepared to face rejection at the time of application for health insurance (whether critical illness policies or cancer care plans). Most insurance companies are not likely to cover cancer patients considering the high risks involved (see Largest Life Insurance Companies in United States).
Other pre-existing diseases
Whether one opts for a critical illness policy that also covers cancer, or a cancer care plan, it is imperative to declare all previous and/or existing medical conditions and ailments at the time of purchasing the policy.
One should also truthfully answer any questions pertaining to genetic predisposition or a family history of any forms of cancer.
Non-disclosure would not just impact the claims related to any cancer-specific treatment undergone, it would also lead to rejection of any other non-cancer treatment expense claims.
Waiting periods
Every health insurance plan defines a waiting period for certain conditions and treatments including cancer. These specific waiting periods differ across policies and insurers, so it would be wise to ascertain the time period for the chosen critical illness or cancer care special plan during which one will not be qualified to raise medical claims.
Preferably opt for a policy that has a low waiting period to expedite the eligibility. The waiting period is only on first time purchase.
Co-payment
Few health insurers impose a co-payment clause (i.e., a percentage of sum insured amount) on cancer treatment expenses which have to be borne by the policyholder. Choosing such a policy would mean that a certain percentage of the costs will always be paid on your own.
Insurance Sub-limits
Some insurers stipulate an upper cap or sub-limit on the amount of coverage offered for cancer treatment. For example, the critical illness plan might be for a sum insured of Rs 50 lakh, but cancer treatment would get covered only up to Rs 5 lakh.
Exclusions
All health insurance policies – whether critical illness or cancer specific – outline a list of exclusions which are conditions and procedures that the insurer is not liable to pay for.
Those looking for cancer-related health insurance should, of course, ensure that cancer is not excluded from coverage. Additionally, this list of exclusions might mention a specific type/s or stage/s of cancer that would be omitted from coverage.
Experimental treatments
Exponential and continuous advancements in cancer therapy have led to novel treatment methods being discovered. Most health insurance plans cover traditional and new age treatments that are approved by medical councils. Radical therapies and unproven treatments would not be covered.
Survival period
Insurers specify the minimum number of days for which the policyholder must survive post diagnosis or treatment of cancer. The health insurance benefit will be accrued only upon successfully passing the survival period. This is a crucial point to be aware of to avoid any future surprises.
Features that aid in increasing the sum insured amount
Restoration benefit for the same disease would be an ideal policy feature to have, as it would lead to reinstatement of the original coverage amount upon exhaustion due to single or multiple claims submission. Additionally, no-claim bonus for claim-free years would also help in augmenting the sum insured amount, which would eventually prove useful at the time of seeking expensive cancer treatment.
Renewability of the policy after the discovery of cancer
The policy may not be renewed once cancer specific feature is invoked. The benefit is usually payable once in the lifetime of the insured.
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AUTHOR: Vivek Narain – Co-founder & Promoter, SANA Health Solutions
