Parkinson’s disease et al.
Critical illness insurance cover are a marketed as riders to contracts of life insurance or as stand-alone products.
Depending on the context the Critical
insurance covers are considered as a life
insurance products or as health
care plans under General insurance. The
important of critical insurance cover are is aptly brought out by Nick Kirwan the Chairman of the
Critical illness insurance Working Group of the Association of British
insurers (ABI) . According to kirwan
,critical illness insurance helps people protect themselves and their
families from the potentially
devastating financial consequences of
critical illness.
Men above the age of 40 fall critically ill at some time or the other in life between
the ages of 40-65. A critical illness insurance policy is designed to
provide the much needed financial
cushion, at a time when it is needed the
most. This policy offers choices one may not have in other policies .
Healthcare or Medi claim policies do not cover the various indirect costs associated with hospitalization whereas the lump sum amount given to the insured , once the illness is diagnosed goes a long way in relieving financial
pressure and mental stress. The terms
and conditions and the method of
financial assistance may be vary from company to company depending upon the target, marketing group and method
of product differentiation . For example, in critical illness policies with accelerated riders the
basic cover may cease to be
operative once a critical
insurance claim is lodged , and is in policies with stand-alone riders,
the basic insurance cover continues even after lodging the critical insurance claim. Some other plans provide for
the reduction in the payments of premium
by adjustments in basic sum insured .
Typically a critical
illness insurance policy has the following benefits. To get the benefit, the insured
must be diagnosed for any of the
specified or identified diseases. Before signing a contract the proponent
should examine the number of specified diseases covered by the contract.
Generally companies may cover 8-10 diseases, and more diseases may be added on payment of extra premium.
LIC’s Asha Deep II’ that pioneered
critical illness as an additional benefit
initially covered only four
specified diseases viz., malignant
cancer renal failure of both
kidneys. coronary artery diseases
in cases where by pass surgery has been conducted and paralytic
stroke leading to permanent disability all subject to conditions .
considering the cost of treatment , LIC was offers critical illness cover as
a rider benefit to other plans, and
offers this benefits to existing policy
holder under certain plans. Once the diseases
is officially diagnosed and
admitted by the company the insured gets the following benefits according to the terms of the policy. It should be
noted that the benefits be noted the
benefits vary from company to company:
1. The company may pay the agreed
sum insured in one lump sum and down own no further liability. 2. No
benefits will be paid on the maturity of the policy , if the policy holder suffers no identified
critical illness.
Alternatively according to the terms of the
contract the company may pay 50% of the
sum insured (subject to certain ceiling) on diagnosis, and the balance to the family on the death of the insured or
on survival at the end of the term. 4.
Annual payment of an amount equal to 10% of the sum assured , commencing from the policy’s anniversary
falling on or after the date of
affliction until the date of maturity or death, whichever is earlier (e. g. Asha Deep II , an LIC policy). 5.
Waiver of premium as per as the terms and conditions of the policy, 6.
Rider benefits , if any like terms benefits accidental death, disability
etc., General conditions of offer may also vary from company to
company, The age at entry ranges between
the ages of 18 and 65 years, and some companies
may restrict the maximum age of
the entry to less than 65 years. The sum insured ranges from Rs. 5 lakhs to Rs. 25 Lakhs and they are
available for varying terms. In India
apart from the four nationalized
insurance companies . Bajaj
Allianz market na critical illness policy, and ING Vysya has its policy called Conquering Life Critical illness Plan.
Health First Plan of Tata AIG offers critical illness cover as a rider benefit. Apart from these
companies cited as examples many other
private insurance companies also market
such plans. Considering the
difficulties experienced by the insuring public in UK, the Association of British Insurers (ABI)
is contemplating possible
changes to the critical illness
insurance policies that are now marketed in the UK. Following are
the major references: