The financial risk of cancer can be potentially high because the components of risk, the probability of the event occurring and the cost of the impact of the event are higher. A report by the National Institute for Cancer Prevention and Research indicates that the risk of developing cancer before the age of 75 is 9.81% for men and 9.42% for women, with an annual incidence rate of 0.08% for the Indian population. This translates to about a 1 in 10 chance of hearing the dreaded diagnosis in their lifetime. The cause of cancer is still an ongoing study ranging from lifestyle, genetics, heredity and stress.
But the treatment of the disease has evolved a lot. On the pharmaceutical side, drug conjugates, gene therapies and several antibodies are vying for an effective solution, while medical technologies are being developed to detect, mark and operate on areas previously inaccessible to surgeons. But being in the first generation of solutions, a developing country like India may not yet be able to access these solutions at scale. This implies the availability of cancer treatments, but at an exorbitant cost; this indicates the high impact cost of an event with a (medically) high incidence rate.
The availability of cancer insurance, a distinct type of health insurance, addresses the risk posed by disease. It can be a useful product, especially for people with a family history of cancer, a stressful environment or lifestyle. The two main crucial differences from health insurance are the provision of a flat rate benefit and the economic cost of cancer insurance coverage.
Cancer insurance can provide an insured sum of ₹25 lakh with an annual premium of around ₹2,000 for a 30 year old and coverage of ₹1 crore to ₹7,500-8,000. The low cost of premium for the high amount of sum insured is ideal for cancer treatment which needs advanced professionals and advanced scientific solutions. A regular health insurance of ₹5 lakh coverage would incur a premium of around ₹9,000 per year. The sum insured is paid in the form of a lump sum at the time of diagnosis, which allows it to be used for unrestricted treatment or to supplement the loss of earnings of the main breadwinner. The affliction of cancer extends to the productivity of the individual, that is, when a lump sum payment at the time of diagnosis works for the insured. For example, at the early stage of diagnosis, 25-50% is paid, and at the major stage, the remaining part of the sum insured is paid. Cancer insurance from Care Health, on the other hand, is an indemnity-based product (payment based on the expenses incurred). These policies also include a bonus-malus with doubling of the insured capital during a claim-free period (for a period ranging from 3 to 10 years).
The availability of cancer insurance, a distinct type of health insurance, addresses the risk posed by disease. It can be a helpful product, especially for those who have a family history, stressful environment, or lifestyle.
Some policies also offer income benefits and waiver of premiums. On a claim in process, future premiums are forfeited. Some policies also offer an income equivalent to 1% of the sum insured paid monthly.
These insurers cover pre-existing conditions (PED) with a four-year waiting period. But a pilot product launched by Star Health Insurance offers cancer insurance to people who have already been diagnosed with cancer. The first of these policies provides a lump sum payment of 50% of the sum insured in the event of recurrence, metastasis and a second malignancy unrelated to the first cancer. Indemnity coverage is also available for other procedures, but with a four-year waiting period. Moreover, being a pilot product and considering the high risk, the product features a low sum assured of ₹3 lakh to ₹5 lakh which comes with an annual premium of ₹21,000 to ₹32,922 and a 10% share condition (payment only on payment of 10% by the policyholder). The reliance on cancer patients (stage 1 or stage 2) is a very distinctive feature and the premium reflects the high risk of recurrence prevailing with the disease, which can be borne to some extent by the insurer.
Policies are available for an age range (depending on the product) of 1 to 70 years in general. These policies are indemnity and will therefore not involve any expiry, redemption or even death benefit. If diagnosed with any form of cancer, payment will involve a seven day survival period before the claim can be processed.
Common or critical illness insurance
Whether it is a feature or a product, cancer insurance only addresses the diagnosis related to cancer, which is why regular health insurance for other conditions is essential, with additional protection against cancer coverage. Building up enough insurance for cancer protection under regular health insurance can be expensive. The drudgery involved in handling claims being an additional hurdle subject to sub-limits on illness coverage, approved procedures and service levels with regular health insurance. Cancer insurance also tactfully addresses the earning potential of the insured with lump sum payments, doubling as a life insurance product within health insurance.
Critical illness insurance also provides a lump sum payment on diagnosis and covers cancer among their list of 20 to 50 predefined conditions. Wider disease coverage explains the near doubling of premiums in critical illness insurance schemes (₹5,500 for a 30-year-old man for ₹25 lakh coverage). The wider predefined list of conditions covered covering all forms and definitions of cancer (leukaemia, lymphoma, sarcoma and autoimmune diseases, for example) and the (slightly) higher prices seem to be the main differences between specific and critical cancers . health insurance products.
April 23, 2022