Authored by: Malay Chitalia

Inspiration: Shree R. Gopinath

Cancer Is Curable!

Since last few years Cancer has become a matter of worry for all of us. Not only for us but for the medical science as well. Being in the Insurance field, I have come across many patients who have been diagnosed as Cancer patients. Research says that by 2020, one out of every ten patients will contract Cancer. There will be a time when every alternate person will have a cancer. It is going to be the most common disease in few years. No doubt it is the life-threatening disease, but looking at the speed at which the cases are increasing, we must learn to deal with it in the due course of time.

Financial Impact

Apart from dealing with it medically, we must know how to deal with Cancer financially. The cost of treatment involved here is huge. The cost of most common surgeries is as below.

• Breast Cancer surgery in good hospital – Rs.5 Lakhs to 8 Lakhs.

• Other Cancer related surgeries – more than 20 Lakhs.

• Bone Marrow surgeries – Rs.40 Lakhs.

The said costs are just one-time surgery costs. Cycles of Chemotherapy, Radiation, diagnostic tests, consultation & medicine costs are extra.

Effective Financial Planning

In today’s time, a family must have a floater health insurance of not less than 25 to 30 Lakhs. If we consider the inflation in the cost of medication in India which is between 14% to 20% year on year, it is advisable to have 50 Lakhs health insurance cover. A prominent oncologist suggests that, whatever Sum Insurance is available, you should buy it. Please don’t argue “How much will be the cost? Why this much of insurance is required?”

One of my female NRI client had diagnosed with cancer at age 43. She survived for 6 long years accompanying this demon disease. She passed away few months back. The total expense she incurred in last 6 years is more than Rs.8.50 Crores. This is a huge amount. She was able to afford it because she had sufficient medical insurance.

There are some expenses which Health Insurance doesn’t cover.

• Non-medical expenses like IV fluids & gloves

• Transportation and food charges

• Surcharges & Govt. Taxes etc.

But these charges go from our pocket. Sometimes, a specialist surgeon charges an exorbitant amount, which generally health insurance companies deny saying they are ‘beyond reasonable’! Cancer being a life-threatening disease, people may choose to treat themselves in the developed countries like U.S.A or Australia as they don’t want to take any chance with their lives. But health insurance does not cover cost of treatment incurred out of India.

Moreover, the Health Insurance covers only the person insured. That means the person who is affected by the event other than patient, does not get covered. For example, a person who is detected as a Cancer Patient, his spouse also takes leave from his occupation for 3 months or 6 months. Now, this is a loss of income for the family. The family is losing 2 incomes at a time; patient’s income as well as spouse’s income. The cost of treatment will be covered by the health insurance policy. But they need other financial support also.

Ensuring flow of finance

The radiation & chemotherapies are very painful procedures for the patients. The patient needs the family to support him emotionally. So, if a person holds a Cancer Cover policy (in addition to the health insurance), the family gets a big relief from the financial part. When a family member is suffering from cancer, the whole family has to fight the battle at many ends. Giving him a best medical treatment is just one aspect, keeping the patient & other family members mentally strong is also a challenge. Arranging finance from time to time is also a challenge.

From above, we understand that, in today’s time having only Health Insurance Policy is not sufficient. We should have “Assurance based Policy” also.

What is ‘Assurance’ Policy? Let us understand systematically.

There are 2 strategies in the Risk Management; Insurance & Assurance.

Insurance Policy: It compensates the amount of medical expense which the patient has actually incurred. For eg. Even though a person holds Health Insurance policy of 10 Lakhs but if actual cost of hospitalisation is only 3 Lakhs, then Insurance Company will pay him only 3 Lakhs. Normally, the products which General Insurance companies offer are “Insurance” based products by nature.

The payment of claim under ‘Insurance Policy’ depends on the extent of loss.

Assurance Policy: The “Assurance” depends on the event. On the occurrence of a particular event, the Company will pay the promised value. Assurance has no relation with extent of loss. Life Insurance policies, Critical Illness policies are the best examples of “Assurance”. The moment event occurs, company pays full amount irrespective of loss occurred. If a person has bought a Life Insurance policy for 1 Crore & he dies due to any event, the Life Insurance policy will pay his nominee 1 Crore. Same way, if a person has bought Critical Illness policy for 50 Lakhs, on detection of a particular Critical Illness, he gets full 50 Lakhs. It has no relation with the expense incurred or loss occurred.

If a person has more than 1 Critical Illness policy, he will get assured value from all the policies on the occurrence of event. But if a person holds more than 1 policy for health insurance, he will get compensation up to his actual expense or maximum up to Sum Insured. There are Critical Illness policies & Cancer specific policies available in the market at a nominal premium.

Cancer has life-altering impact on the patients and their family across all segments of the society. However, proper financial planning can aid in ensuring the impact is minimal on the finances and thus provide a much-needed mental support in the process of recovery.

Insurance and Assurance policies are the only two things which you should buy when you don’t need them as it is likely that by the time you get the need, they will not be available. They must be bought when you are healthy. Companies do not give insurance to sick people as finally they are focused on preventive aspects than corrective actions.

Wishing you a very healthy, wealthy & blissful life!