By Prashant Nimgade · Published · Updated
It is a specialized health insurance policy for individuals.
With the increasing number of new cancer cases in India, estimated at 18.7 lakh (1.87 million) in 2026 in a recent study, there is a growing need for protection against this financial risk. These cancer insurance policies are specifically designed to cover all cancer-related expenses and additional monetary risks incurred during the policy term.
Cancer is usually lengthy and expensive to treat.
Its treatment always involves extended cycles of surgery, chemotherapy, radiation therapy, targeted therapy, immunotherapy, follow-up consultations, and monitoring, which are all difficult on the patient and their family. The entire journey can extend from a few months to several years.
In a study, treatment expenses for early-stage cancer were found to be in the range of ₹5 lakh to ₹7 lakh per case. For later-stage and more complex cancers, the amount easily blew up to ₹20 lakh to ₹30 lakh or even more.
And to make matters worse, many Indians end up paying around 3.3 lakh annually for Cancer treatment out of their own pockets, according to research conducted on more than 12,000 cancer patients at AIIMS Delhi, PGI Chandigarh, and Tata Memorial Centre Mumbai. In the same study, it was found that those diagnosed with cancer were more likely to suffer from Catastrophic Health Expenditure (CHE) and impoverishment than undergo hospitalization.
To protect against such personal calamity, a cancer insurance policy is a must. And it is important to know how to choose one for your situation.
Choosing a cheap plan may be tempting, but choosing an insurance that rightly complements your existing general health insurance plan and can cover all your medical challenges can be extremely helpful in keeping away unnecessary distress.
But to make matters easy, an insured sum of ₹10L to ₹35L is a good estimate.
You can also calculate your coverage requirement using:
Ideal Coverage = Expected treatment Cost + Income loss during treatment + Non-medical Costs
As an example:
Buy ₹35L or ₹50L coverage.
Cancer Insurance policies in India aim to provide coverage for either cancer treatment or income disruption caused by the occurrence of cancer. Hence, they are usually indemnity-based or Benefit-based.
It may be a better choice if people fear unexpected increases in their cancer treatment; that often happens due to the treatment needing costly advanced procedures or multiple cycles spanning years. A lump-sum payout often misses these unforeseen costs that arise later, and the patient now has to pay the rest out-of-pocket.
People who do not have a base health insurance policy or have one with a low limit (like ₹5 Lakhs) may choose this policy type.
On the other hand, if the major concern comes down to the disruption of livelihood caused by the cancer, then this plan becomes the better choice. Hospital bills are often half the battle. The rest is usually the secondary non-medical costs caused by loss of income during treatment, existing fees and loan payments, travel and hotel costs for out-of-city treatments. And, in early cancer diagnosis, an additional benefit of waiver of premiums is often given, which further reduces the financial burden on the patient and their family.
People with a good base insurance policy, who are maybe also the breadwinners of their family, and worry about expenses during their treatment, often feel safer choosing this policy type.
Policy Basics: New India Cancer Guard vs. Max Life Cancer Insurance
● Conventional Treatment Coverage — Chemotherapy, Radiotherapy, Organ Transplant, and Onco-surgery.
● Advanced Treatment Coverage — Proton Treatment, Personalised & Targeted therapy, Hormonal Therapy or Endocrine manipulation, Immunotherapy including immunology agents, Stem cell transplantation, and Bone marrow transplantation.
● Hospitalization Benefits — Room rents, ICU, nursing care, surgeon fees, and in-patient care.
● Additional Benefits — Pre/Post Hospitalization, Day care costs for up to 58 days, Ambulance cover up to INR 3,000 per hospitalization, Follow-up care up to INR 10,000 once in a Period of Insurance, Second Opinion up to INR 5,000.
● Lump Sum Benefit — This is a single cash payment made to the patient upfront and not paid to the hospital as reimbursement. And one does not need to present any medical bills to avail this. 20% of Basic or Indexed Sum insured, for a person diagnosed with early-stage cancer. For a major stage cancer, the benefit is 100% of Basic or Indexed Sum insured.
● Premium Waiver Benefit — All future premiums payable under the policy are waived, and the policy continues, for an early-stage cancer diagnosis only.
● Income Benefit — 10% of the insured amount is payable for up to 5 years, even if the policy term ends or the policyholder passes away, for major stage cancer diagnosis only.
● Cumulative Bonus / Indexation Benefit — The sum insured increases by 10% at each renewal for every claim-free policy year, up to a maximum cap of 150% of your original base cover.
Key Exclusions
sources:
New India Insurance Cancer Guard Policy
Axis Max Life Cancer Insurance plan
After receiving a confirmed diagnosis of cancer, do the following to claim the insurance.
● Inform your Insurance provider.
● Submit relevant documents.
● The claim is evaluated.
● The approved claim is paid to your bank account.
Tax exemption on insurance payouts depends on the type of insurance provider and the type of insurance provided.
The New India Cancer Guard Plan is a health insurance policy provided by a health insurance company. The Max Life Cancer Insurance Plan is also a health insurance policy, but is provided by a licensed life insurance company. Under the current Income Tax Act, 2025, specific provisions regarding tax exemptions are mentioned only for sums received under life insurance policies (Section 10(10D)). But there are none for payouts under health insurance policies.
Further, the definition of “Income” (Section 49) does not mention anything about health insurance payouts. The definitions of “Capital Gains” (Section 67(5)) or “Capital Asset” (Section 2(22)), which could be assumed to apply to lump-sum insurance payouts, do not include anything on it.
In such a circumstance, it might be helpful to compare the payout of a Benefit-based cancer insurance plan that is considered mature after the lump-sum payout, to the Maturity payout of a life insurance plan. In the old tax regime, this maturity payout was fully tax-exempt for any premium amount. Now, any policy issued after April 1, 2023, and if premiums are under 10% of the sum assured and over ₹5 Lakh, then payouts will be tax-exempt. The same may be applicable for the benefit-based Max Life Cancer Insurance Plan.
As the tax law interpretations are uncertain here, policyholders should consult a tax professional for advice specific to their situation.
For any individual, the news of a cancer diagnosis can be very difficult to deal with, but they can be prepared for the financial impact with a Cancer Insurance Plan that suits their income and needs.
And a cancer insurance plan can be a much-needed supplement to a general health insurance, providing support for essential non-medical and supporting care expenses throughout their long treatment journey.
With these benefits of a cancer insurance plan in place, patients can focus completely on their care and recovery.
Disclaimer: This content is for informational purposes only and should not be treated as financial, medical, or insurance advice. Policy terms, exclusions, and benefits vary across insurers. Please review official policy documents and seek professional guidance before making decisions.
Can Cancer Insurance Replace Health Insurance?
No. A cancer insurance plan is best used as a supplement to your general health insurance. It can pay for non-medical but essential expenses while you are receiving your treatment, which a health insurance plan simply cannot cover. Using both together is usually the best choice.
Does Cancer Insurance Cover All Cancer Types?
Not necessarily. Some policies may exclude specific types of cancers. One should review the policy carefully for the exact scope of coverage.
Can I Buy Both Cancer Insurance and Critical Illness Insurance Policies Together?
Yes, they can be bought together. A Critical Insurance policy is designed for many serious medical conditions like cancer, stroke, or heart attack. But a cancer insurance policy is specifically built to help overcome the financial risks associated with cancer. Based on your needs, any or both can be chosen.
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