Over the last 20 years, India has witnessed a dramatic rise in the number of cancer cases. A study based on data from the Mumbai population-based cancer registry revealed a fourfold increase in cancer patients between 1964 and 2012. By 2025, India will see a projected increase in cancer cases to 1.57 million from 1.46 million in 2022. Alongside the growing incidence of cancer, treatment costs are also escalating rapidly. Estimates of out-of-pocket expenditure (OOPE) for cancer vary based on the time period, type of cancer, and items included in the cost. For instance, in 2006–2007, the average OOPE for cancer treatment was ₹36,812, but recent years show significantly higher amounts. In 2020, the treatment cost for breast cancer averaged ₹2,58,095, with direct hospital costs comprising 56.3% (approximately ₹1,40,000).

The exorbitant costs of cancer treatment have caused catastrophic health expenditures (CHE) for many families, often resulting in bankruptcy and pushing families below the poverty line. Under these circumstances, cancer insurance has emerged as a crucial component of insurance protection. Despite its importance, cancer insurance remains a poorly understood subject. This article aims to demystify it.

Why you should consider cancer insurance (even if you already have health insurance)

Cancer treatment can incur a variety of costs that are not always covered by standard health insurance policies, which typically provide only partial reimbursement for a range of medical expenses. For instance, a standard health insurance policy may cover treatment costs only at advanced stages requiring hospitalization or may exclude modern treatment methods, like immunotherapy or targeted therapy. This is because standard policies are designed to cover general hospitalisation costs and not specific illnesses. Cancer insurance plans, however, are tailored to address these gaps effectively.

Another important factor to consider in cancer treatment is the monetary loss due to loss of income. This is something that standard health insurance policies rarely account for. While undergoing treatment and recovery, professional life often comes to a halt, but everyday expenses such as rent, children’s school fees, and household costs continue. Patients may have to rely on savings or take loans to fund these expenses, which can negatively affect their long-term financial stability. Cancer-specific insurance policies provide a solution to this problem by offering dedicated coverage for cancer-related costs. These policies typically pay out a lump sum upon diagnosis, which can be used to cover treatment costs, living expenses, or other financial needs during recovery. This immediate cash infusion is often critical in accessing necessary medical care without depleting personal savings or assets.

Types of cancer insurance policies in India: Indemnity and fixed benefit plans

Cancer Insurance Plans are broadly classified into two types in India: 

1. Indemnity Based.

2. Fixed Benefit Plans.

Indemnity-Based Plans – These plans pay for the actual medical expenses of cancer treatment, up to the sum insured. They pay for expenses like hospitalization, chemotherapy, radiation therapy, surgery and medications. Indemnity plans offer the advantage of coverage that pays for a substantial portion of treatment-related expenses, meaning that the policyholder is guarded against having to pay significant costs out of pocket.

Fixed Benefit Plans: Also called critical illness plans, these policies provide a specific lump sum amount to the insured upon being diagnosed with cancer, regardless of the actual treatment cost. This amount can be used as per the policyholder’s convenience not only for medical expenses but also to cover loan repayments, household expenses, or alternative treatments; thus offering flexibility. The most important benefit of these kinds of fixed benefit plans is that they provide freedom of finance during tough times and enable people to think about recovering exclusively, without worrying about money.

Indemnity Based Plan vs Fixed Benefit Plan – How to decide?

It really comes down to your needs and finances. If you want coverage that reimburses you for what you actually spend on treatment, then an indemnity plan may be a good fit. But if you want a lump-sum payment when you’re diagnosed, which you can use however you want, a fixed benefit plan may be a better fit. Consider your health care needs, current coverage and financial goals so that you can make an informed decision. 

In closing, the need for a dedicated cancer insurance policy in India becomes even more apparent with the increasing cancer incidence and monetary impact.

Cancer Insurance Frequently Asked Questions

1. What Is Cancer Insurance, and How Is It Different From Health Insurance?

Cancer insurance is a type of specialized policy that is intended to cover the costs of treatment and related expenses for the rare disease. Unlike traditional health insurance, which covers a wide spectrum of health issues, cancer insurance only applies to cancer and typically makes lump-sum payouts once a diagnosis has been made. 

2. Is it possible to get a cancer insurance policy over a standard health insurance plan?

Yes, you can. In fact, if you have health insurance, you can also have a cancer-specific policy, which will protect & cover all cancer treatment & other costs. 

3. Does cancer insurance cover all kinds of cancer?

Policies have different coverages. While most plans cover a broad spectrum of cancers, some might exclude or offer conditional coverage for certain types. So, be sure to read through the policy details if you want to know where coverage stops. 

4. At what stage of cancer diagnosis does this insurance policy then pay?

It can depend on the terms of the policy. Some policies cover a payout upon diagnosis at any stage, while others may specify the stage at which benefits are due. You should also check the specifics of the policy. 

5. Do cancer insurance policies have a waiting period?

Yes, the majority of cancer insurance plans include a waiting period, usually lasting from 90 days to several months from the policy inception date, when no claims are eligible. 

6. Can I purchase cancer insurance if I have a family history of cancer?

And yes, you can buy cancer insurance if you have a family history of cancer. But premiums can be different, and some insurers might have underwriting guidelines or exclusions based on your medical history. 

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