LIC's Cancer Cover: Should You Buy It?

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LIC recently introduced a comprehensive cover for meeting all your cancer related expenses in case you as a life assured is diagnosed with an early-stage or major cancer health issue.\

Any individual aged between 20 and 65 years can buy the cancer cover for the sum assured value between Rs. 10 lakh and Rs. 50 lakh.

For the premium payment annual and high-yearly modes are available.

Premium shall be decided based on the entry age of the proposer and shall remain unchanged until 5 years.

For the payment or if sum assured amount is claimed- Two options are there, sum assured value or increasing sum assured by 10% of the basic sum assured value for 5 years.

Waiting period of 180 days is applicable from the date of issuance of the policy cover of renewal of the plan whichever is later in case the person insured is diagnosed with any stage of cancer.

Some of the favourable points to note

Premium for the cancer cover shall be less as it functions a typical term life plan with no maturity benefit, surrender value or loan value.

Also, through online purchase, individuals can save upto 7% on the premium cost.

Benefit is payable only if the insured is diagnosed with cancer and more so in the event if major Cancer issue is found then future premiums are waived off. Other than this 1% of the sum assured shall be payable for the rest 10 years irrespective of the policy term.

Few drawbacks of the plan

1. Unlike the health insurance plans which are family floater in nature and can cover all family members this plan has to be bought at an individual level.

2. In case if the person is diagnosed with 2 cancers then LIC will pay for the claim depending on the life stage with the highest benefit.

3. In respect of the early-stage cancer, claim can be made only once

• The biggest advantage to save the cost is, customers can buy this plan ONLINE. By purchasing it online, you can save the premium (7% of Tabular Premium).
• The premium will be less as this product acts like typical term life insurance where there will not be any maturity benefit, surrender value, paid-up value or loan value. Only in the case of event happening (in this product if you suffer due to cancer), insured will get the benefit.
• In case of identifying the major stage cancer, the benefits are much much better. Because you no need to pay the future premiums, 1% of applicable sum assured will be payable for the next 10 years (irrespective of the term of the policy left).
• Premium changes every 5 years. Hence, unlike endowment or money back plans where the premium remains constant, here the premium will alter based on the claim experience of LIC. Hence, if the premium is not affordable after 5 years, then you will end up with cancer cover.
• There are 180 days waiting period. Hence, the risk will not start immediately after buying the policy.
• Survival period of 7 days also applies to this policy.
• In case of increasing sum assured, even though your sum assured will increase each year by 10%, but such increase is restricted to "for first five years starting from the first policy anniversary or until the diagnosis of the first event of Cancer, whichever is earlier". Hence, it will not benefit you in long run. You have to again buy one more such policy after such 5 years over to cover the cost of cancer treatment at that time.
• This is exactly like term life insurance but disease-specific. Hence, if you do not suffer from cancer during the policy period, then you will not get any policy benefits like typical endowment or money back plans.
• NO TPA involved here. Hence, the claim may be bit cumbersome and sometimes depends on how the concerned official will take it forward.
• Tax benefits under Sec.80D BUT not under Sec.80C.
• There are many cancer-specific insurance products available from general insurance companies. I am not sure why LIC entered into this field.
• A normal person finds it hard to understand the exclusions. Hence, hard for common man to relieve that they are protected from cancer disease.
• You can't buy it for your family like general insurers provides you. You have to buy individually. This may create managing multiple plans and also cost may shoot up.
• If there is more than one Cancer diagnosed in an event, the Corporation will only pay one benefit. That benefit will be the amount relating to the stage of Cancer which has the highest benefit amount. This I think a hindrance to this product also.
• Also, early stage cancer can be claimed ONLY ONCE during the policy period.
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Basavaraj Tonagatti
Basavaraj Tonagatti is the man behind this blog. He is an Independent Certified Financial Planner (CFP), engaged in blogging since 6 years. BasuNivesh blog is ranked as one among India's Top 10 Personal Finance Blog. He is not associated with any Financial product/service provider. The purpose of this blog is to "Spread personal finance awareness and make them to take informed financial decisions." Please note that the views given in this Blog/Comments Section/Forum are clarifications meant for reference and guidance of the readers to explore further on the topics/queries raised and take informed decisions. These should not be construed as investment advice or legal opinion."
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Comments
1. manish says:
November 22, 2017 at 3:52 PM
One of the common cancer for women is breast cancer which seems to be excluded here.
Could you please confirm on this.
Reply
o Basavaraj Tonagatti says:
November 22, 2017 at 10:40 PM
Manish-May be but I am not sure of technical terms of what and in which category they consider it.
Reply
2. Rajiv Gupta says:
November 20, 2017 at 4:24 PM
Great Post! Thanks for sharing Features, Benefits, premium etc of LIC Cancer Cover (Plan 905).
Reply
o Basavaraj Tonagatti says:
November 20, 2017 at 6:08 PM
Rajiv-Pleasure.
Reply
3. Manoj kumar says:
November 16, 2017 at 5:50 AM
In 90s there were two policies Ashadeep and Jeevan Asha where some diseases were covered including malignancy. Theses policies fall under endowment and the claim settlement ratio under these policies is good. The claims are processed by LIC staff in consultation with DM. Nobody should be worried about claim settlement as the people in LIC are quite experienced.
Reply
o Basavaraj Tonagatti says:
November 16, 2017 at 6:00 AM
Manoj-I know about both policies. But do anyone or any agents sold those policies saying they also cover such diseases??? Even if agents were told, how many claims arrived with such diseases??
Reply
4. RAJESH PAI says:
November 15, 2017 at 9:34 PM
Dear Sir,
I have studied the brochure of HDFC cancer care, Star Cancer care policy. Among the said policies and LIC cancer care, I felt LIC cancer care is very reasonable in cost, coverage is good and exclusions are reasonable. Waiting period in HDFC is 48 months, which is 6 months here. Preconditions in HDFC is much more than LIC. Star brochure is little confusing, it states that it covers persons diagnosed with cancer. Waiting period is the most dangerous clause and you should always observe that in any cancer care policy Sir. According to the policy, patient should NOT be diagnosed of cancer or cancer causing lesions during Waiting period.
Sir, it feels like this policy of LIC is far better than HDFC cancer care, but premium is costly, but in reliability LIC is good i feel.
Sir, OVERALL you have analysed this policy very nicely.
regards
RAJESH PAI
Reply
o Basavaraj Tonagatti says:
November 16, 2017 at 6:07 AM
Rajesh-I agree most of your points. Also, when you compare the existing plans, this plans holds good. No doubt in that. My only concern is how fastly the LIC settle the claims. Because this plan is not Life Insurance. Rest of all features are good to me.
Reply
5. Sunbir Singh Wadhwa says:
November 15, 2017 at 12:15 PM
Dear Basavaraj,
Can you please suggest which Cancer Insurance Policy in the market has the widest cover available for (a) Individuals (b) Family Floater
Thanks in advance for your help
Reply
o Basavaraj Tonagatti says:
November 15, 2017 at 12:39 PM
Sunbir-Check with general insurers or standalone insurers. Like many critical illness insurance products by default covers cancer insurance. This I feel exhaustive than going for separate cover for each such major diseases.
Reply
6. rohit says:
November 15, 2017 at 11:58 AM
do we have to go though medical check up to take this policy i want to take this for my parents age 65 & 62
how can i take this
Reply
o Basavaraj Tonagatti says:
November 15, 2017 at 12:08 PM
Rohit-Check underwriting rules with the LIC Branch.
Reply
o L R SREERAMKUMAR says:
November 18, 2017 at 6:00 AM
No Need for any medical check up for any age upto age 65
Reply
7. J.Jeyaseelan says:
November 15, 2017 at 9:02 AM
sir My sister in law thirumathi kannambal is suffering from second stage THROT AND LUNGS CANCER,and taking Treatment in Madurai Rajaji Hospital Since from2012, and now took FLUOROURACIL injection,ip500mg per week,HIS date of biorth is 03-02-1959.she is living with his mother at door no8-16/1,senbagamalar 11 street,viswanathapuram ,madurai 625014 and his cell no is 9842954644.kindly inform 1.can she eligible for major stage cancer cover [plan905],if so how much primium to pay. 2.whom i contactfor taking policy[he should come to her house for Dioganus the canser] 3.By this relation ,shall i be the proposer and his son as nominee,and document required 4.Regarding policy whatare all the documents required. thanking you for replay
Reply
o Basavaraj Tonagatti says:
November 15, 2017 at 9:59 AM
Jeyaseelan-Sad to hear about your sister-in-law. In my view, LIC will not issue the policy as she is already suffering from cancer. However, if you want to try, then contact the local LIC Officials.
Reply
 L R SREERAMKUMAR says:
November 18, 2017 at 6:04 AM
100 percent correct
Reply
8. Rajwant Singh says:
November 14, 2017 at 10:15 PM
Sir how come tax benefit of ?50000 u/s 80D.
It is 25,000
Reply
o Basavaraj Tonagatti says:
November 15, 2017 at 10:41 AM
Rajwant-I said up to the maximum of Rs.55,000. Refer the link I shared for better understanding.
Reply
9. PINAK PANI Dasgupta says:
November 14, 2017 at 8:29 PM
This policy is no doubt a good policy. But what will be the premium ? Premium charts may pl be provided.
Also Star Health has launched same policy. We have to ascertain the benefits first.
Reply
o Basavaraj Tonagatti says:
November 15, 2017 at 10:42 AM
Pinak-You will get the premium chart on LIC portal. But in my view, without a second thought I may say that LIC premium will be costlier than Star. But you may go with LIC as a reliable insurer.
Reply
 L R SREERAMKUMAR says:
November 18, 2017 at 6:25 AM
You are 100 percent not correct ,
LIC PREMIUM IS LESS THAN STAR
LIC BENEFITS ARE MORE THAN STAR EXCEPT ONE BENEFIT WHERE STAR GIVES POLICY EVEN TO AFFECTED PERSONS OF CANCER WITH ELIGIBLE TERMS BUT LIC PROVIDES ONLY FOR HEALTHY AS PER ELIGIBLE TERMS.
STAR GIVES MAXIMUM 5 LAKH AS SUM INSURED .LIC GIVES FROM 10 LAKH UPTO 50 LAKH
Reply
 Basavaraj Tonagatti says:
November 18, 2017 at 9:10 AM
Sreeramkumar-Forget about to whom they give. I am neither franchisee of LIC or Star. Hence, I neither defending LIC or Star. Check Star premium they have the trick always to reduce the premium by infusing UNKNOWN co-payment clause. Hence, they offer at cheap.
Reply
10. Sankarasubramanian says:
November 13, 2017 at 4:21 PM
As far as the LIC is concerned the claime settlement percentage is high.
At the same time the proposer should have thorough knowledge about the features and benefits of the Plan.
Reply
o Basavaraj Tonagatti says:
November 13, 2017 at 5:57 PM
Sankarasubramanian-Claim settlement is HIGH only in case of endowment and money back plans but not in handling health-related products.
Reply
11. dipak kumar bardoloi says:
November 13, 2017 at 11:07 AM
The claim settlement position in LIC ,both in Maturity claims & death claim is very good.Since the TPA is not roped in for settlement of claim, the claims will be solved without hassles,provided the very condition of contract of good faith is satistified. Since variety of illnesses are not being covered, the policy holder will be in a better position as regards the type of cover he can opt for.Otherwise, on many occasions the claims are rejected for operation of exclusion clauses,the life assured not being properly informed.
Reply
o Basavaraj Tonagatti says:
November 13, 2017 at 11:53 AM
Dipak-Claims may be settled fast. But will LIC equipped the staff to handle such immediate settlement cases. Such products are not like typical Life Insurance Products.
Reply
 Sreedhar says:
November 14, 2017 at 9:02 AM
Claim settlement will be assisted by Divisional Medical Referree, who's a highly qualified doctor. Don't worry about LIC's ability to handle claims portfolio
Reply
 Basavaraj Tonagatti says:
November 14, 2017 at 9:11 AM
Sreedhar-I am not worrying about LIC's ability nor against this policy. But handling Life Insurance claims is different than handling the claims of such products. As you said, it will be assisted by DM Referree, it again consumes time as low-level officials have to wait for the process consent at top level.
Reply
12. LAXMI NARAYAN MEENA says:
November 13, 2017 at 8:10 AM
I think it's a very useful plan covering special disease like cancer. LIC's claim settlement ratio is very good in comparison to others. Thanks sir for providing so good information.
Reply
o Basavaraj Tonagatti says:
November 13, 2017 at 8:50 AM
Laxmi-LIC's claim settlement is good by accepting the claims mainly of Endowment Plans. Hence, you can't generalize and say that LIC is capable of handling such high-cost immediate result plans. LIC has to equip the team to handle at ultra speed.
Reply
13. V g Ambatkar says:
November 12, 2017 at 6:38 PM
The claim will be settled by LIC officials and not TPA is boon. As lics death claim settlement ratio is very high where the investigation is done by officials.
Reply
o Basavaraj Tonagatti says:
November 12, 2017 at 9:12 PM
Ambatkar-Is the death claim settlement is same as claim settlement in this case? Whether you checked the average claim settlement Sum Assured of LIC?
Reply
14. MAALA KUPPUSWAMY says:
November 12, 2017 at 2:17 PM
Great day to you Sir.Under early stage cancer(optionA),only 25% is payable on diagnosis and three years premium stands waived.what will happen to 75% of SA? Whether it will be given for onward treatment if the same could not be cured at an early stage.If not what is the use of paying further premium? Please clarify.
Reply
o Basavaraj Tonagatti says:
November 12, 2017 at 2:20 PM
Maala-Good question. But as of now, no clarity. However, the life risk will continue up to maturity and during that period, if you diagnosed with major stage cancer, then the facility will be applicable.
Reply
15. S P DAS says:
November 12, 2017 at 12:05 AM
What will be the annual premium for a 65 yr. male under option 2 ?
Reply
o Basavaraj Tonagatti says:
November 12, 2017 at 8:50 AM
Das-Wait for the launch on 14th.
Reply
16. Surya says:
November 11, 2017 at 9:30 PM
Thank you for information on this new policy. It will be really helpful for us readers when you update your opinion and advice on this policy and compare it with other available options once you assess new information as and when available.
Reply
o Basavaraj Tonagatti says:
November 12, 2017 at 8:52 AM
Surya-Surely I will.
Reply
17. Anjni says:
November 11, 2017 at 7:25 PM
Since Medicaid policy cover cancer also.Do we need to buy it separately ?
Reply
o Basavaraj Tonagatti says:
November 12, 2017 at 9:14 AM
Anjni-It may or may not based on policy exclusions. Also, the typical health insurance will not suffice such high-cost diseases. Hence, insurance companies launching standalone products.
Reply
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Sum assured is available from Rs 10 lakh to Rs 50 lakh. There were two options -- sum assured and increment of the sum assured by 10 per cent of basic sum assured for the first five years, it said.

Life Insurance Corporation of India (LIC) on Tuesday announced the launch of a cancer cover as a health insurance policy with sum assured ranging from Rs 10 lakh to Rs 50 lakh.
The 'Cancer Cover' policy, which can be taken by those in the age group of 20 to 65, was a non-linked plan with yearly and half-yearly premium paying options, a company release said.
Fixed benefits would be paid in case the Life Assured was diagnosed with any specified early and/or major stage cancer during the policy term subject to terms and conditions.
LIC South Zone Zonal Manager R Thamodharan unveiled the new plan in Chennai.

Read more about: cancer, lic, insurance
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