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Understanding Cancer Insurance, Critical Illness Coverage, and Health Insurance

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Understanding Health, Critical Illness and Cancer Insurance
February 27, 2024

Table of Content

 

Healthcare costs are rising by the day, and with inflation added to the mix, it is no surprise that to avail quality healthcare for ourselves or our loved ones, we need to shell out a considerable sum. While this is true for regular illnesses or lifestyle diseases, imagine how high the expenses of managing a critical illness or life-threatening illnesses like cancer, kidney failure, etc., would be. Staying financially protected against medical emergencies is, therefore, of utmost importance. 

A suitable health insurance policy is the first thing that comes to mind when planning for health coverage. But did you know that a health insurance policy is quite different from a critical illness insurance policy or a more specific cancer insurance policy?

Read on to understand these three in depth and find out what to opt for, and when. This article thoroughly analyses health insurance, critical illness, and cancer insurance. It also forces you to assess how you can follow a combination approach using these three types of insurances to adequately cover yourself and your loved ones. 

Understanding Critical Illness and Cancer Insurance

To decide which insurance plan will work the best for you, it is important to understand how  health insurance, critical illness, and cancer insurance, work. Primarily let us first understand the latter two. 

Now, a regular health insurance plan aims to cover the hospitalization costs for severe ailments and treatments. Some health insurance plans may cover your medicines and hospital stay. Health insurance is, therefore, a must-have at all times. 

However, there are several critical illnesses where expenses are not limited to your hospital stay or procedure alone. Illnesses like cancer, heart disease, organ failure or stroke are such that there is a significant drain on finances in everyday life and sustenance of the patient. So, what does one do in such a situation?

This is where critical illness insurance or specifically a cancer insurance policy, comes in. Both of these are associated with easing the financial burden of life-threatening diseases. So, we can safely say that health insurance only covers hospitalization expenses, but critical illness insurance offers a lump sum when you are diagnosed with a life-threatening condition. This amount can be used in any way you like. Similarly, cancer insurance covers all stages of cancer — pre, early or major and is a great help as a regular income plan covering all associated medical costs of cancer treatment. 

But then, how are cancer insurance plans different from critical insurance covers? The table given below explains just that. Read on to find out:

Criteria

Cancer Insurance

Critical Illness Insurance 

Services

  • Payout - Done in a lump sum or in monthly instalments as per policy terms.

  • Cover - Comprehensive in nature, covering all kinds of cancers and all stages of cancer

  • Cover starts when cancer is diagnosed and continues for the treatment duration. 

  • Premium waiver for usually three years is possible per policy terms.

  • Payout - Done in full. Done in lump-sum. Done when diagnosed with a specific illness once survival criteria are met.

  • Cover - Besides 30+ critical illnesses most of these plans also cover accidental death or disability.

  • Covers only certain stages of cancer and certain types of cancer.

  • Premium waiver may or may not be possible.

Need

Ideal for those who need a low premium lump sum cover for the treatment of cancer.

Ideal for those who need insurance cover for different critical illnesses, including heart diseases, stroke, cancer, kidney failure, and tuberculosis, among others.

Advantages

  • Income benefit

  • Lumpsum payment

  • Premium waive off

  • All stages of cancer covered

  • Assured income post-diagnosis

  • Increased sum insured

  • No need for hospitalisation to get cover amount

  • A large spectrum of illnesses are covered

  • Low premium

  • Tax benefit

  • Can supplement health insurance

  • Lumpsum payout possible

  • Elaborate coverage for medical expenses

  • Sum assured

  • Hassle-free claim process

Disadvantages

  • May not cover cancer-related illnesses

  • High premiums for senior members

  • Exclude skin cancer

  • Depending upon the insurer, the policies vary significantly in the diseases covered.

  • Pre-existing medical conditions are not covered.

What it covers

Covers all types of cancer and all stages (pre, early or major and advanced) of cancer.

Covers over 30+ critical illnesses. Customers can choose from the available covers to make a customised plan. One can also enhance the insurance cover through a critical illness benefit rider by paying a small extra premium. 

Who can Buy

Anyone above 18 years of age can buy cancer insurance cover. The lump-sum amount is decided as per the stage and type of cancer. However, the claim can be made only after the 7-day survival period post-diagnosis.

Anyone above the age of five years is eligible to buy a critical illness cover. The plan can include children, spouses and dependent parents.  However, the claim can be made only after the 15-day survival period post-diagnosis.

Inclusions

All stages of cancer

Advanced stages of cancer and 30+ critical illnesses

Exclusions

Some cancers are not covered in this plan. These are - Cancers caused by pre-existing diseases, skin cancer and those caused by sexually transmitted diseases.

A critical illness cover excludes pre and early-stage cancers from the cover. In addition, congenital defects and illnesses, drug or alcohol addictions, self-injury, etc, are some other exclusions from the policy. 

If you are still confused about whether to invest in health insurance or simply go for critical illness insurance, read on to find out which is better and how to decide.

Which is better, Critical Illness Cover or Health Insurance?

As medical expenses are rising yearly, health insurance coverage is a must-have. It would be unwise to go on in life without health insurance. Therefore, it is best not to see these insurances as health insurance vs critical illness vs cancer insurance. Rather, have supplementary insurance covers along with your health and term insurance for better health coverage and financial protection. 

Both critical illness and cancer insurance plans are good supplementary plans that can be taken along with your existing term life insurance cover, health insurance, or savings insurance plan. 

Since the funds you get from your critical illness policy are given in lump sum, they can be used as you feel appropriate. Where the health insurance policy will cover your hospitalisation and treatment expenses and the critical illnesses policy will take care of the rehabilitation costs, transport expenses, and nursing care expenses, if any. They may also help you recover the loss of income that you may have incurred due to the serious ailment. 

You must also check if your savings insurance plan or term plan offers a critical illness benefit as a rider. This will help you secure your investments for your and your family’s future. 

Is Cancer Covered Under Critical Illness Insurance? 

Most critical illness insurance plans offer an insurance cover for cancer. However, you must check which stage and type of cancer your critical illness plan covers and which are excluded. 

Mostly only the advanced stage is covered in these plans. That is why people who have a family history of cancer or suspect they might be predisposed to the disease prefer to go for a cancer insurance plan. This plan covers all stages of cancer and all types of cancers except skin cancer. 

Also, a critical insurance policy does not cover pre-existing health conditions. However, cancer insurance offers you a cover for your pre-existing ailments, excluding cancer.

Conclusion

We hope to have offered a clear insight into the highlights and distinctions of health insurance, critical illness, and cancer insurance through this read. With a good understanding of the unique features and differences, it is easy to make informative assessments and decide what works best to meet your financial needs. Informed decision-making always aligns best with individual and family financial goals, planning and protection. With adequate cover for various health scenarios, you will surely find yourself more relaxed and self-assured as you move ahead.

FAQs on Cancer Insurance vs Critical Illness vs Health Insurance

Q: Is cancer covered by critical illness insurance?

A: Yes, cancer is covered by critical illness insurance. However, you must review the policy terms and conditions to understand the extent of coverage. Also, assess the types of cancer that are included, and excluded (skin cancer).  

Q: What is the difference between critical illness, cancer insurance, and health insurance?

A: Critical Illness Insurance provides a lump sum payout when a specified critical illness that is listed in the policy, is diagnosed. This may include cancer. It caters to offer financial support for medical expenses, treatment, and other related costs during a critical illness.

Cancer Insurance is a specific type of insurance. It focuses on providing cover for various stages as well as types of cancer; covering its related expenses. 

Health Insurance is a broader cover. It caters to a range of medical expenses such as hospitalisation, doctor visits, surgeries, and preventive care. Although it covers cancer, there is no lump sum payout. 

Q: Which specific types of cancer are included in critical illness insurance coverage?

A: The specific types of cancer covered can vary between insurance providers and policies. Generally, critical illness insurance covers breast cancer, lung cancer, prostate cancer, and others. You must read the policy document before purchasing the insurance to check for exclusions and inclusions. Commonly skin cancer is an exclusion.

Q: What is the difference between illness and disease?

A: ‘Illness’ refers to a person's overall poor health or being unwell. ‘Disease,’ on the other hand, is a specific pathological condition that affects part or all of an organism. It has identifiable symptoms. 

Q: What is the difference between terminal illness and critical illness?

A: Terminal Illness is a condition where there is no known cure, and the patient is not expected to live beyond a certain period. In such a case, individuals may be eligible to receive a portion of their life insurance benefit while they are still alive.

Critical Illness, on the other hand, implies a severe health condition which may or may not be terminal. It can significantly impact a person's life. Critical illness insurance provides a lump sum payout upon diagnosis of a covered condition.

ARN – MC/02/24/8898

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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