Policy review: LIC Cancer Cover, a life insurance policy with health coverThis looks like an out-and-out health insurance policy from Life Insurance Corporation of India (LIC) geared towards life’s most feared ailment – cancer. We explain how it works.

LIC’s Cancer cover will pay you a sum of money up to Rs 50 lakh if you are diagnosed with cancer both as a lump-sum and as income.

It has two variants:

  1. Level Sum Assured: The sum assured remains constant throughout the policy
  2. Increasing Sum Assured: The sum assured increases at 10% for the first five years from the issuance of the policy or until the diagnosis of cancer, whichever is earlier.

Remember, this works more like a term insurance. So there is no maturity value (no money is paid out in the event of insurance holder surviving without contracting cancer – which is good news in itself)

Key Benefits

Early Stage Cancer

The policy pays out 25% of the sum assured when early-stage cancer is diagnosed and waives premiums for the next three years. It covers early stage cancers such as carcinoma in situ, prostate cancer, thyroid cancer, bladder cancer, chronic lymphocytic leukaemia and cervical intraepithelial neoplasia.

Major Stage Cancer

It pays out 100% of the sum assured when major stage cancer is diagnosed, minus any sum paid out on the diagnosis of early-stage cancer. It also waives future premiums and pays 1% of the sum assured as income per month for 10 years (even if they extend beyond the term of the policy) following the diagnosis, regardless of whether the life-assured survives for 10 years. In other words, it will also pay this income benefit to the nominee.

Major stage cancers covered include malignant tumours such as lymphomas, leukaemia and sarcomas.

Limitations

  • Once a payout is made for major stage cancer no further payout will be made for a subsequent cancer diagnosis.
  • If more than one cancer is diagnosed, the policy will only pay for one benefit.
  • No benefit shall be paid within 180 days of purchase of the policy and the policy will terminate in case of diagnosis within this period.
  • No benefit will be paid if the life-assured dies within 7 days of diagnosis.
  • Pre-existing conditions are excluded
  • Conditions resulting from AIDS, drugs or radioactive fuels are excluded

Sample Premium Tables

The premium rates under this policy are fixed for the first five years. LIC can change them thereafter based on its experience.

Option 1: Level sum assured

Premium per Rs 1,000 of sum insured

Age (years) Policy Term (years)
20 30
Male Female Male Female
30 1.19 2.42 1.69 3.09
35 1.67 3.44 2.62 4.22
40 2.58 4.70 4.22 5.61
45 5.09 6.54 7.91 7.66
50 8.42 8.29

Option 2: Increasing sum assured

Premium per Rs 1,000 of sum insured

Age (years) Policy Term (years)
20 30
Male Female Male Female
30 1.56 3.35 2.32 4.36
35 2.26 4.79 3.69 5.99
40 3.58 6.57 6.05 7.98
45 7.08 9.01 11.33 10.76
50 11.95 11.48

Key Details

Minimum entry age: 20 years

Maximum entry age: 65 years

Minimum Policy Term: 10 years

Maximum Policy Term: 30 years

Minimum Premium: Rs 2,400

Minimum Basic Sum Assured: Rs 10 lakh

Maximum Basic Sum Assured: 50 lakh

Premium Payment Mode: Annual, Half-yearly

This policy will not acquire any surrender value and no loans can be taken against it

No maturity value (no money is paid out in the event of insurance holder surviving without contracting any cancer)

LIC will give you a 7% rebate (discount) on the premium if paid online.

Author
Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.