Recent years have witnessed a significant surge in the prevalence of illnesses worldwide, and India is no exception. According to recent statistical data, in India, the likelihood of developing cancer in one's lifetime is estimated to be 1 in 9 individuals.1 This alarming trend highlights the importance of being prepared for unforeseen health challenges and the need for specialised healthcare coverage to address critical illnesses effectively.
When it comes to health insurance, two common products often come up: cancer policy and critical illness policy. While they both provide coverage for severe health conditions, their scope and benefits differ. In this article, we delve deeper into the distinctions between these policies.
What is Cancer Insurance?
Cancer insurance is a unique form of healthcare coverage that offers financial protection against cancer-related medical expenses. Cancer insurance policies are not meant to be used as independent/stand-alone coverage. Instead, they serve as supplementary coverage to enhance your existing health insurance policy.
How Does Cancer Insurance Work?
Cancer insurance provides you with a lump sum payment if you’re diagnosed with cancer. It covers various types of cancer, including breast cancer, lung cancer, ovarian cancer, stomach cancer, prostate cancer, etc. at all stages of the disease, whether it is the pre-stage, early-stage, or major stage.
The payout can be used to help cover various expenses associated with cancer treatment, such as hospitalisation costs, chemotherapy sessions, surgical procedures, and more. You can also use it to replace lost income and make any lifestyle changes to manage cancer. Essentially, it offers additional financial support to alleviate the financial burden that often accompanies cancer treatment.
Why Buy Cancer Insurance?
When it comes to cancer, the costs involved in treatment and recovery can be overwhelming. And the road to recovery might require you to take a break from work which can also lead to a loss of income, taking a toll on you emotionally and financially. By purchasing cancer insurance, you can ensure that you have the necessary funds for your medical treatment as the policy provides a lump sum amount to cover various costs, such as medical treatments, hospital stays, rehabilitation, and other related expenses.
One of the advantages of having cancer insurance is that it acts as a savings plan. Instead of depleting your savings or struggling to find funds, you can rely on the coverage as provided by the insurance policy.
Given that cancer is one of the deadliest health issues worldwide, purchasing a cancer insurance policy is a wise decision. This is especially recommended for individuals who are at high risk due to factors like tobacco or smoking habits, family history of cancer, and other related risk factors.
What is Critical Illness Insurance?
Critical illness insurance is a type of health insurance that offers financial protection for severe and life-threatening diseases. It works by providing a lump sum payment if you are diagnosed with a life-threatening illness listed in the policy. You can include critical illness insurance as an add-on to your existing health insurance plan or as a standalone policy by paying an additional premium. It is also possible to combine it with a life insurance plan for added coverage.
Critical illness insurance covers a range of serious ailments such as heart disease, stroke, organ failure, cancer, etc. It takes care of costs that regular health plans may not cover, making sure you have enough support during difficult times.
Why Buy Critical Illness Insurance?
Dealing with a critical illness can take a toll on your finances, especially considering the soaring medical expenses. Critical illness insurance can come to your rescue by providing financial coverage and safeguarding your hard-earned savings. You will receive the payout once the specified critical illness is diagnosed, ensuring that you receive the financial assistance when you need it the most.
The funds received from a critical illness insurance policy can be utilised in any way that suits your needs. It can help you with things like replacing the income you’ve lost, paying for rehabilitation (if needed), covering other expenses like transportation, etc.
Comparison of Critical Illness Insurance and Cancer Insurance
Let’s understand more about the two policies through a comparative table –
| Parameters | Critical Illness Insurance | Cancer Insurance |
|---|
| Purpose | It is a type of insurance that specifically covers the expenses related to the treatment of listed critical illnesses. | It is a type of insurance that specifically covers the expenses associated with the treatment of cancer. |
| Extent of coverage | It provides coverage for a specific set of critical illnesses that are mentioned in the policy document. While cancer is typically included in most critical illness plans, it's important to note that not all types of cancer at different stages are covered by these plans. | It offers comprehensive coverage specifically for cancer at all stages of the disease. |
| Exclusions | The coverage provided by critical illness insurance can vary across policies. However, it's important to note that certain situations like self-injury or health issues caused by alcohol or drug use may not be covered. When it comes to cancer, the coverage for different stages of the disease may also depend on the terms of the policy. | The coverage offered by cancer insurance may differ depending on the insurance company. However, in general, it's important to note that skin cancer, cancer related to pre-existing conditions, and cancer caused by sexually transmitted diseases may not be covered. |
| Survival Period | The survival period in critical illness insurance may vary depending on the policy. However, as a general guideline, the usual requirement for the survival period is around 30 days. | The survival period is set at around 7 days from the date of diagnosis. It is important to note that this timeframe can vary depending on the insurance company. |
| Initial Waiting Period | The waiting period usually ranges between 90 to 180 days. | The waiting period for critical illness insurance can be either 90 days or 180 days for the early stages of illness. However, the duration of the waiting period can vary based on the policy you choose. |
| Stages of Cancer Covered | It usually provides coverage for advanced stages of cancer. | It provides coverage for all stages of cancer. |
Cancer Insurance v/s Critical Illness Insurance: Which One Should You Buy?
When deciding between a cancer policy and a critical illness policy, it's important to consider your own needs and circumstances. Each option has its own advantages and limitations, so it's crucial to assess your specific goals.
Both critical illness insurance and cancer insurance stands beneficial to your health insurance policy. If you are at a higher risk of developing cancer due to factors like family health history, environmental factors, or lifestyle choices such as smoking or tobacco use, purchasing cancer insurance may be a good idea. With the ABSLI Cancer Shield Plan (UIN: 109N103V03), you have a health insurance plan that provides financial coverage for every stage of cancer.
However, it is important to remember that cancer is not the only life-threatening disease. For those who seek broader coverage and protection against multiple illnesses, a critical illness policy may be a good choice. This means that if you are not at high risk for cancer, you can consider purchasing a critical illness plan.
Before deciding, you should carefully review the terms, coverage details, exclusions, and limitations of any insurance policy. This will help you make an informed choice that aligns with your specific needs.
To conclude,
Both cancer policies and critical illness policies offer valuable protection and financial support in tough times. By carefully assessing your specific needs, reviewing policy terms, and considering your risks, you can make an informed decision that gives you the right financial security. With the right policy in place, you can have peace of mind knowing that you are financially protected - during tough times.Shape
Sources
[1] https://pubmed.ncbi.nlm.nih.gov/36510887/
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2 April 2025
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