Max Life Cancer Insurance Plan - Analysis

Managing the probable risk of a cancer diagnosis becomes an imperative for any burgeoning family, especially in the context of the primary breadwinner, lest chance brings about financial difficulties in the form of lost income and exorbitant medical bills. One of the best possible solutions to indemnify oneself against the risk of a cancer diagnosis is to seek coverage under a well-designed cancer insurance policy. There are many such products available on the market currently, both in the form of riders and standalone insurance coverage for the specific purpose.

About the Max Life Cancer Insurance

Cancer Insurance Plan from Axis Max Life Insurance promises to deliver comprehensive cover for all stages of cancer and additionally, provides for a wide range of financial benefits as well. These include income guarantees and tax benefits among others. The policy is a non-linked, non-participating insurance plan.

Max Life Cancer Insurance - Eligibility

The eligibility criteria for buying the policy are simple and quite similar to most insurance products out there. The policy is available to any legal resident of India between the ages of 25 and 65 years. The maximum maturity age is limited to 75 years.

Premium and Payment Terms

Premiums against the policy can be paid either monthly, quarterly, semiannually and annually. The policyholder can choose the method while signing up for the plan. Premiums can be either paid directly online or at the insurer’s offices. The premium payment mode can be switched out by submitting a request in writing to the insurer. There is also a discount available on the total premium amount if the insured chooses to pay his premiums annually.

Sum Assured Indexing

One of the major features of this policy is that the sum assured is indexed for every claim free year. Indexation of the sum assured basically means that the total value of the policy will grow at a rate of 10% simple interest every year if a claim is not made. Once a claim has been made however, the indexation will cease.

For example, let’s take the example of Mr. Vikas. He purchased the Max Life Cancer Insurance plan with a policy period of 15 years and a sum assured of 10 lakhs. Mr. Vikas paid his premium for the first 5 years and kept the policy active, without making a claim. At the end of 5 years, the sum assured under the policy had grown to 15 lakhs at 10% simple interest per annum. Once Mr. Vikash filed a claim at the end of the 5^th year, the sum assured will be locked in at 15 lakhs without any further indexing for the remainder of the policy term.

Max Life Cancer Insurance - Key Features

Some of the most visible and differential features of the Max Life Cancer Insurance plan includes:

• It is a comprehensive cover plan which provides protection at all stages of cancer.
• Payments are doled out in lump sum making it easier to cover medical costs at all stages.
• Premiums are waived for the entire policy term in case the insured is diagnosed with early stage cancer.
• Guaranteed income benefit for up to 5 years in case the insured is diagnosed with late stage cancer.
• Claim free years amount to increasing sum assured which means that financial coverage under the policy grows incrementally.
• As usual, buying into the policy also earns the insured tax benefits guaranteed by the Income Tax Act.

Stages of Cancer Covered

• Carcinoma in Situ (CIS) or Pre-Cancer Stage – This stage exhibits abnormal cell growth which medical experts do not classify as cancer. However, CIS has a proclivity for progressing into full form cancer and therefore doctors sometimes recommend surgical intervention.
• Early Stage Cancer – This stage involves the growth of cancerous tissue or tumors impacting deep into the surrounding area, although not having spread to lymph nodes and other body parts.
• Major Stage Cancer – Stage III and IV is where the malignant tissue has metastasized and spread to other organs as well as lymph nodes.

Benefits – Overview

The 3 major benefits

• If the insured is diagnosed with carcinoma in situ and provided that the policy is still in effect and premiums paid up to date, all future premium payments will be waived till the end of the policy term. Additionally, 20% of the sum insured or the index sum insured (whichever is payable) will be paid as a lump sum amount to the insured.
• For a major stage cancer diagnosis, the entire sum insured or the indexed sum insured (whichever is applicable) will be paid as a lump sum amount, less any amount already paid up during the early stage diagnosis.
• In case of a late stage diagnosis, the insured will also receive income benefits in the form of 10% of the sum insured on 5 successive policy anniversaries. The income benefit is payable even if the policy term has expired. In case the insured is deceased while the full or portion of income benefit is still unpaid, the amount will be remitted to the claimant.

Benefits will not be paid to cover claims against the same carcinoma in situ or a specified early stage cancer of the same organ. In case 100% of the sum assured or indexed sum assured has already been paid out, any claims for major stage cancer diagnosis will amount to only the income benefit being payable.

Exclusions

As is the case for all insurance instruments, the insurer lays out certain conditions under which the benefits of the policy will not be applicable.

• Benefits are not payable under the policy for any covered stage of cancer or if the life insured dies within 6 months of the policy coverage commencement. In case such a claim is placed with the insurer, the company will refund the entire premium amount received till date, starting from the point of policy commencement, along with all late fees and interests paid in that context.
• Policy benefits will not be paid in case the life insured dies within 7 days of a being diagnosed for the first time, be it carcinoma in situ or major stage cancer. The insurer will only consider the claim if the life insured is alive when the diagnosis was performed.
• The insured will also not provide any benefits under the policy terms if a cancer diagnosis arises out of any of the following:
  • Pre-existing conditions which are cancerous, both primary and metastatic for which the life insured received a diagnosis, medical advice or treatment within 48 months prior to the commencement of the policy term. Non-cancer preexisting conditions are however not excluded.
  • Exposure to alcohol, contraband or drugs not prescribed by a physician or medical practitioner.
  • Sexually transmitted diseases (STDs), Human Immunodeficiency Virus (HIV) and Acquired Immunodeficiency Syndrome.
  • Nuclear, chemical or biological contamination.

Final Takeaways

Here are some important things to consider before you choose to invest in the Max Life Cancer Insurance Plan.

• There are no death benefits under this plan. However, if the insured dies within the waiting period (180 days), the premium paid from the point of policy commencement, fewer taxes will be reimbursed to the claimant.
• There are no maturity, surrender or survival benefits under this plan.
• There is a 180 days’ waiting period for the coverage offered under the policy to come into effect. Additionally, there is also a 7 days survival period.