Wednesday, September 22, 2021

Policy against cancer with less premium

Cancer was a rare heard 10 years back but now we are seeing people around us dying from it. pollution and change in food habits along with drastic change in a lifestyle is the culprit behind this. If cancer is recognized in early stages, one can come out of it unscathed, say experts.

But it is very tough to detect it is in early stages as the symptoms get seen only during later stages, and cause immense financial stress for the treatment. Government run insurance company LIC has come up with a policy to suit cancer needs, plan 905. We will go through the policy here.

Exclusively for cancer
This policy by LIC is exclusively for cancer patients that give one time payment to cancer patients. This is a traditional policy (nonlinked). Renewal is done with yearly payments and coverage stays only with renewal.

Eligibility and coverage
People with ages between 20 to 65 are eligible for this with 10 years being the least limit and 30 the highest. For example, if a 20 -year-old takes this policy, the insurer will have coverage till he becomes 30 at least, and the maximum is 50 years of age. But if a 65 -year-old takes this, he can have only 10 years of coverage till he becomes 75. If a 55 -year-old takes this, he will have a maximum of 20 years of coverage till he becomes 75. The least insurance amount is 10 lakhs while the maximum is 75.

It depends on the insurance amount. There is not going to be any change in the first 5 years. LIC can change the premium with increased number of claims. Minimum annual premium is 2400 and can be renewed online.

Two coverage options
First is level sum insured where the total insurance amount gets unchanged. The other is increased sum insured where the insurance amount keeps on increasing every year. The amount keeps increasing for the first 5 years or till getting cancer at 10% per year whichever comes first.

This policy is intended for cancer patients only, and is beneficial if the insurer gets car during the policy, period and nothing am paid after the expiry of policy and also there is no facility of policy surrender and since there are no payments, there is no scope for loan on this policy.

Early stage cancer
If cancer is detected in early stages, 25% is paid one time, and the policy stays in vogue after that. Premium is exempted for 3 years after detection and needs to be resumed after this. Once this is availed, the remaining period has only major stage cancer cover. If a major stage is discovered later, remaining amount will be paid. Early stage cancer cannot get paid for a second time even if detected.

Major stage cancer
If already paid for early stage cancer, that amount will be deducted from the total amount and paid during this. If a major stage cancer is found, total amount will be paid as said above along with 1% of amount is paid every month for 5 years. This has no relation with policy time period and even nominee gets paid every month for 5 years in case expiry of policy holder. If a major cancer is detected, premium payment is exempted from next year and monthly income benefit starts immediately. LIC pays only one time even if 2 cancers are detected at a time.

Tax benefits
Premium paid in this policy is exempted from the 80D section of income tax for a maximum amount of 55000. Section 80C cannot be used for this policy.

In early stage cancer, benign tumors, tumors that are not fatal, and less dangerous tumors are not covered. Dysplasia, intraepithelial neoplasia, squamous intraepithelial lesions, carcinoma in situ, melanoma in situ, and tumors related to HIV fall in this category.

Waiting period
The waiting period is 180 days from the application of policy or 6 months from the date of renewal of risk coverage whichever is more. This stands true for any cancer. If a cancer is detected during this waiting period, apart from no payment, the policy is scrapped and cancer detection only after waiting period is paid.

Payment only if alive
Policy holder should live at least 7 days after detection to get the benefits.

Important features
This policy can be bought online with a reduction of 7% in premium. Attractive full payment and monthly income benefit for major stage cancer. There is a chance of premium increment every 5 years. Policy can be changed by LIC at its discretion. One can stop renewing if not interested. This policy doesn’t have any third party administrator, therefore claim process is a bit arduous.

It is hard to understand exemptions. A single policy cannot be take for the whole family and each has to take individually. Other insurance companies are also providing cancer coverage policies, so, it is better to compare before a final decision.

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