Why buy Cancer Insurance if we have health insurance 42346 - Why buy Cancer Insurance if we have health insurance?
April 9, 2022

Emergency funds are for the times when you are in complete distress! Right?

Monthly savings helps you in managing the living expenses like electricity bills, fees, rent, travel, etc. But emergency funds enable you to strongly manage both happy or sad expenses that you knew would happen but when it was not known. In the similar manner, a health insurance reimburses you or pays for the hospitalization expenses you incur. But a cancer insurance policy will pay the lump sum when you are diagnosed with cancer.

Understood?

If things still look ambiguous, let us decode the coverages and both the types of the policies one by one.

What is health insurance?

A health insurance is a type of insurance policy that covers the medical expenses that arise after due to an illness/accident. It is a contract between the policyholder and the insurance company. After the realization of the premium, the insurance company assures the insured to pay when she/he gets hospitalized.

The condition of mandatory hospitalization applies for the admissibility of the claim. The insurance policy compensates for the cost of hospitalization, cost of medicines, doctor’s consultation fees, etc. In short, the policy covers you for hospitalization, day-care, post and pre hospitalization, etc.

A health insurance policy is an indemnity plan that is traditional in nature. It implies that the policy pays from the sum assured. Once the sum assured is exhausted the insured will have to bear the cost of hospitalization from his pocket.

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The policy offers benefits but does not help much when you suffer with dreaded critical illnesses like heart ailments, stroke, kidney failure or cancer.

The number of patients suffering with critical illness is on the rise. Out of all, we have an exponential growth in cancer patients. New studies have shown that cancer deaths have climbed up to a number more than 23 million in 2019. In the year 2021, the number of new cancer patients was estimated to be 1.9 million cases.

The cause of the rising number of cancer patients is many. But out of those the common reasons include tobacco, alcohol, sedentary lifestyles, and obesity. The work-culture in the country leaves youngsters with less opportunity to include health routines in their life. It leads to a rapid rise in cancer patients. As the cases increase, the awareness also gets better. This is why people consciously choose the cancer care policy.

Further, let us read more about the cancer insurance plan and its benefits.

What is cancer insurance?

Cancer insurance is a defined benefit health plan that pays the insured when diagnosed with the dreaded disease like cancer. The insurance policy is designed to offer financial support to the policyholder. A cancer cover pays in lump sum to the policyholder when diagnosed with cancer.

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With the lump sum payment, the insured is able to manage the high cost of treatment in the hospital of their choice. The best part with the cancer insurance policy is that it covers all stages of cancer. The insurance plan is also available at quite an affordable premium. Cancer cover for Rs.10 lakhs can be purchased at Rs.120/per month for a policy term of 20 years.

Depending on the type of the stage, a life insured is diagnosed with, the insurance company releases the payment. For an early stage cancer, the insured may get 30% of the sum assured. While for the major stage of cancer diagnosis after the first test, the insured will release 100% of the sum assured.

Thinking that when the cancer insurance policy pays in lump sum why is there a need for the health insurance plan?

You can also have thoughts that cancer has never run in your family so you do not have to buy a cancer policy and one health insurance for the entire family is appropriate.

Let us read further to find out the relevance of cancer insurance if you have health insurance.

Why buy cancer insurance if we have health insurance?

You can buy a cancer insurance policy even if you have a health insurance policy as:

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  1. It is affordable: A cancer insurance policy with a health plan always helps. It gives you a wide coverage. The cancer cover is available at an affordable price which is why you must add the policy to your investment portfolio.
  2. Gives high cover: The cancer cover gives you high cover for a sum assured of Rs.10 lakhs or more. The premium is also low even for such a high sum assured limits. When you can get a high protection amount at a low price, it is better to own it and stay protected.
  3. Pays in lump sum: The cancer cover pays in lump sum unlike a health insurance policy. As soon as the doctor confirms the diagnosis of cancer, the insurance company approves of the claim. Whereas in a health insurance policy, the claim will be settled either on the cashless basis or will be reimbursed. Depending on the actual amount of expenses incurred as per the bills, the insurance company will process the payment.

But under a cancer insurance plan, the amount is released and the claim documents can be deposited later.

  • Covers all stages of cancer: A cancer cover offers coverage for all stages of cancer. So broadly, there is no hassle of claim rejection unless as specified in the exclusions. In a health insurance policy, only the diseases that are specified will be covered. Though the concept of waiting period applies in both, the duration varies.
    1. Lump Sum amount can be used for anything:The lump sum amount paid in the cancer insurance can be utilized either for the treatment of the illness or for the loss of income. If the sole-breadwinner in the family suffers with cancer, the whole family suffers with the financial crunch. With the lump sum benefit, you prevent the savings to flow on the treatment. The health insurance policy on the other hand pays only for the expenses incurred, that too, after the verification of the expenditure made.
    2. Waiver of premium: Under cancer insurance, after the insured is detected with an early stage of cancer, the insurer allows the waiver of premium for 5 next 5 years under the policy. The cover and the benefit continues as it is. No such condition applies in health insurance. If you as an insured wishes to avail the benefit under the policy, you have to pay the premium continuously without break for more than 30 days. The period of 30 days is a grace period, which applies to both the types of health insurance plans.
  • Income benefit option: On diagnosis of a major stage of cancer, a cancer cover provides monthly income to the insured. The condition is chosen at the inception of the policy. No such benefit is applicable under the health insurance plan. This is why owning a cancer plan helps when you want to protect your family from financial stress.
  1. Tax benefit: Both the health insurance plan premiums are eligible for deduction under tax liability as per Section 80D of Income Tax Act, 1961. If you do not cover the premium limit under the health insurance plan, it is better you claim the benefit under the cancer cover policy.
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Conclusion

These were the reasons for which you should own a cancer insurance policy. Diseases do not raise alarm before hitting you. At times, you have to be cautious and proactive to be financially prepared and keep the disease away. If you also want to get protected better, you can buy a cancer insurance policy. For more inputs on the policy, visit the link.

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