Mr. Bajaj buys cancer coverage of ₹30 lakhs, which increases by ₹3 Lacs (10%) for every claim-free year. There are 3 possible situations in which this plan could work.
Situation 1: He is diagnosed with major-stage cancer after 6 years
He receives a lumpsum payout of ₹45 lakhs, policy terminates here and he receives income of ₹3 lakhs every year for next 5 years
Situation 2: He is diagnosed with early-stage cancer after 6 years and survives rest of his policy term without being diagnosed of major stage cancer.
He gets ₹9 Lacs (20% of the Increased cover of ₹45 Lakhs) as early-stage cancer benefit. All his future premiums are waived off. Policy continues with a cover of ₹36 Lakhs.
Situation 3: He is diagnosed with early-stage cancer in the 7th year & major-stage cancer in the 10th year.
a) An early-stage cancer benefit of ₹9 lakhs is paid to him & all his future premiums are waived off.
b) He receives a major stage lumpsum payout of ₹36 lakh, policy terminates here and he receives income of ₹3 lakhs every year for next 5 years.