Can you bear cost of cancer?

The surging incidence of the disease and rising treatment costs make it imperative to secure one's finances. Find out how to buy the best cover. 

There are few things more alarming than battling cancer. One is not having the money for its treatment. According to WHO, 10 lakh new cases are reported in India every year.While the risk of dying from cancer before the age of 75 is only 7.1%, according to Globocan 2012, an international cancer research project, insurers claim that one in five cancer claims is by those between 36 and 45 years. According to a 2004 research, the spending in a cancer-afflicted home was 36-44% more than in other households with similar demographics. 

In the past 10 years, these costs have risen significantly. "The costs have gone up due to more expensive infrastructure, new technology-based investigation costs and newer drugs," says Naresh Parmar, CEO, Karnataka region, Apollo Hospitals. A skewed doctor-to-patient ratio (one for 2,000 patients) worsens the situation. 

The scenario not only calls for ways to prevent the disease but also adequate financial security to tackle treatment costs. While there are several players in the insurance market offering a variety of products to combat the costs, it is not easy zeroing in on a product. 

Why insurance is essential: 

Since cancer care is long-term in nature, it translates into a recurring expenditure. This has a huge financial implication for the family, making it imperative to buy insurance. With cancer in mind, new products with special features and higher covers are being launched by the insurance industry. You can pick from the regular health policy that covers hospitalisation expenses, critical illness covers that insure a range of diseases, including cancer, and lastly, specialised cancer care products. 

Importance of screening: 

If detected early, cancer treatment is more effective, and less costly. You can also avail of tax deduction of up to Rs 5,000 annually under Section 80D for such screenings. 

Typically, however, patients approach a doctor only when the disease has advanced, making treatment more expensive and survival less likely. "In India, 70% of cancers are detected in advanced stages. Voluntary screening is abysmally low even among the educated," says Parmar. Genetic screening has made it possible to avail targeted therapies that are more effective. However, these are more expensive.

 

Health insurance policy: 

A regular health plan, individual or family floater, is an indemnity policy that covers medical expenses incurred during hospitalisation. It pays for the costs as long as it is within the sum insured limit. It covers all major critical illnesses, including cancer, but the waiting period is usually 3-4 years. 

However, there are two big drawbacks of such plans. One, it comes at a high price. A Rs 10 lakh indemnity policy for a 30-year-old costs Rs 10,000 a year, compared with a dedicated critical ill ness cover, which costs only Rs 3,000. Even if buy a floater cover for two adults, it will cost you Rs 15,000 annually, but a critical illness plan for two would cost around Rs 6,000 year. This is be cause the health plan takes bigger risks and covers a wider range of ailments. It will pay for your hospitalisation bill along with the cost of treating a major ailment, whereas the critical illness plan will pay only in case you are diagnosed with one of the acute illnesses. 

Two, since such a cover has sub limits and caps for various heads, it usually doesn't cover the entire expense of hospitalisation. It also fails to cover the full cost due to the recurring nature of medical care. If you want to consult a facility or specialist outside India, it will not be covered. 

"The average size of a health cover is around Rs 5 lakh, which might be able to take care of the initial cost of treatment or provide for generic treatment of breast and cervix cancer. However, where the cost is higher, you would need a special critical illness plan that can foot bigger bills," says Sanjay Datta, Chief Underwriting Officer, ICICI Lombard General Insurance. 

Critical illness covers: 

A dedicated critical illnesses (CI) plan provides cover against a range of diseases at a competitive price. Since an acute illness can mean loss of income, prolonged domiciliary care and change in lifestyle, the burden could include more than hospital bills, which is beyond the scope of an indemnity plan. 

The CI policy pays a lump sum on diagnosis. The lump sum can be used to pay for the expensive treatment or recuperation aids. You won't require a hospital bill to make a claim. 

This plan comes with a waiting period of 90 days. This also does not offer lifelong renewability. It can be bought as a standalone policy or rider. "The rider is cheaper since it is pushed as an add-on with a base product," says Datta. The only disadvantage is that it is attached to another plan and if you want to discontinue the base plan you'll have to give up the CI cover as well. Also, riders do not offer a high sum insured. 

The biggest drawback is that such plans cover cancer only at an advanced stage. "It will pay for cancer only if the tumour shows uncontrolled growth, with invasion and destruction of normal tissues," says Sudhir Sarnobat, CEO, Medimanage, a health insurance consultancy firm. 

Cancer care products: 

Recently, HDFC Life introduced a dedicated cancer care plan that covers early stages of cancer. The insurer pays 25% of the sum insured at initial stages and 75% or 100% at an advanced stage, depending on whether a claim was made at the early stage. The plan can be renewed up to 85 years. A Rs 20 lakh cover for a 35-year-old would cost only Rs 1,800 per year and the maximum cover size available is Rs 40 lakh. 

"A critical ailment plan provides a lump sum benefit, whereas the cancer care product provides this benefit along with a waiver of future premiums. The plan also provides an indexation benefit," says Sanjay Tripathy, Senior EVP, Marketing, Product, Digital & E-Commerce, HDFC Life. The premium variant of the plan pays an additional 1% of the sum insured for five years on diagnosis at an advanced stage. The downside of such plans is it is a targeted, cancer-only product. 

What should you buy? 

A health insurance plan will not be sufficient, but one needs to buy it to cover hospitalisation risks for other ailments. You can depend on it for paying initial surgical and generic treatment costs. Buy a critical illness plan instead of a dedicated cancer care product to take care of the costlier treatment. Cancer is not the only ailment that threatens us. Hence, a wider coverage would be a wiser pick. You could buy a dedicated plan only if you fall in the high-risk category of people suffering from cancer. In such a case, paying an additional Rs 2,000 or so a year may be worth it.

http://timesofindia.indiatimes.com/business/personal-finance/Can-you-bear-cost-of-cancer/articleshow/47954246.cms