Understanding the intersection of financial literacy and cancer

A vital connection

Financial literacy is crucial in India, and there is huge gap in this literacy rate in the country. Only 27% of the population is financially literate, which means only one out of every five Indians is equipped to deal with one of the most crucial aspects of life. This literacy rate becomes all the more crucial, if an individual or any family member goes through cancer treatment, as cancer treatment includes high medical costs, loss of income and taking loans.

Let us talk about the financial challenges people face during cancer treatment, the importance of insurance with proper health coverage, and the need for financial literacy in India.

Financial challenges during cancer treatment

Cancer treatment is a long and expensive process, often involving multiple stages of care, diagnosis, surgery, radiation therapy, and systemic therapies. The financial burden of cancer treatment can be overwhelming, with out-of-pocket expenses (OPE) being a significant contributor to the overall cost. In India, the OPE for breast cancer treatment alone can be as high as ₹3,00,000 per patient annually. This burden often forces patients to resort to borrowing, taking loans at high-interest rates, selling assets, and mortgaging jewellery, leading to financial catastrophe.

The importance of health insurance

Health Insurance is thus, of primary importance when it comes to cancer treatment (or for any other illness). The insurance penetration stands merely at 4.2%, which leaves a huge scope for penetration with the country. Within this, health insurance penetration reaches out to around 30-35% of the population, which leaves a huge gap, in terms of consumer outreach. A proper health insurance policy, can take of a lot of medical expenses, starting from diagnosis, to medication, room rent, chemotherapy, surgery, post-treatment care etc. And today, insurance companies have introduced multiple policies like comprehensive health insurance, critical illness cover, with multiple top-up plans, which can cater to the financial needs and capacity of every individual. A critical illness cover for example, can immensely help with cancer diagnosis and treatment process. It is important to understand which kind of policy will suit the most, as per one’s needs and requirements.

Significance of financial literacy

Financial literacy is of paramount importance in today’s scenario, which can help individuals prepare for their life goals and emergencies. First and foremost, people should look at creating an emergency fund which can be used in case of any unprecedented life incident like cancer. Secondly, people should also look at multiple investment options which can help in wealth management and growth. A lot of financial literacy courses, podcasts, information by financial experts can help people in charting the financial roadmap in a planned way. A planned financial saving will help any individual become better prepared to ward off the financial stress related to cancer treatment.

Starting to save from a younger age is crucial to building a financial cushion for unexpected expenses, such as cancer treatment. Financial literacy courses help individuals understand the importance of saving and investing and the various investment options available, including mutual funds, stocks, and fixed deposits. The government has launched various initiatives in India to promote financial literacy and savings, including the Sukanya Samriddhi Yojana and the Pradhan Mantri Jan Dhan Yojana.

In case of cancer care, financial literacy can play a crucial role in navigating the financial challenges associated with cancer treatment. Understanding the financial aspects of cancer care can empower patients and their families to make informed decisions, manage healthcare expenses, and mitigate financial stress during an already challenging time. Financial literacy can also help people in evaluating and comparing treatment options, based on their costs and potential financial implications. Patients can work with healthcare providers to assess the financial impact of different treatment plans, considering factors such as medication costs, hospitalisations, and follow-up care.

Being more financially sound, also equips individuals to explore alternative sources of financial assistance, such as government programs, charitable organisations, and patient advocacy groups. By understanding available resources and eligibility criteria, people can access financial support to reduce the burden of medical expenses.

While people talk about cancer awareness and cancer treatment, one significant aspect of cancer care is financial preparedness, which is often overlooked. This aspect needs to be equally taken care of, so that the cancer treatment journey is smooth without much of an economic hassle.