So
Aviva has launched a much awaited online critical illness plan. This covers 12
major diseases. This plan is available on line and thus can be purchased
without the help of an agent and premium is cheaper by 30 to 40% compared to
offline products available in the market. As a financial planner while making
recommendations we first recommend our clients to have adequate life, health
and disability insurance cover. Income and wealth protection is the first step
in financial planning and nobody should ignore this. We never jump to wealth
accumulation without actually taking care of insurance need of the family. Why critical
illness policy is also important because in case you are diagnosed with major
diseases than immediately your earning stops or capacity to earn comes down
substantially. Critical illness plan plays very important place in this. It
pays you a lump sum amount equal to sum assured in case you are diagnosed with
any of the major diseases covered like heart attack, kidney failure, stroke or cancer
etc. The amount is paid and is not dependent on the quantum of expenses
incurred by you for treatment of the disease diagnosed. We have strongly been
advising our clients to buy critical illness plan while making recommendations
in their financial planning but most of them did not buy the same and postponed
it due to high premiums. There are a very few plans available in the market and
those are not uniform in coverage. Critical illness plans are made available by
both with life insurance and general/health insurance companies. The number of
diseases covered ranges from 4 to 12 creating confusion for the consumers to choose
any particular plan. The accident disability plans on the other hand are
available mostly with all insurers are at par and premium of accident
disability is much cheaper than even life insurance premium. Whereas premium
for critical illness is minimum four times of life insurance premium and this
higher cost make it unaffordable for most of the people buying critical illness
insurance. A few life insurance
companies offer waiver of premium rider for critical illness instead of buying
it as a separate rider without understanding the implication. In case of Waiver
of premium rider what you get is a waiver from payment of future premium after
you have been diagnosed with critical illness. This does not help you much.
Therefore it is always advisable to buy separate critical health plan or a
proper critical illness as separate rider so that you are paid lump sum at the
time when you require it most as once you are diagnosed with critical illness and
you continue with the same standard of living. Critical Illness plans are
nothing but income replacement plans as your life insurance plan will not pay
because you are still alive whereas your health insurance plan will reimburse
only the hospital expenses. Therefore, critical illness plan is necessary to
substitute your income in case of major diseases.
Eligibility
conditions of Aviva’s Health Secure plan:
Minimum
entry age is 18 years and maximum entry age is 55 years. The minimum term offered
in the plan is 10 years & maximum is 30 years subject to maximum maturity
age of 65 years. The plan is regular premium paying with yearly and half yearly
payment option. The minimum premium payable is Rs. 2,000 in the plan. The
minimum sum assured offered is 5 lakhs and maximum is 50 lakhs. Plan also
offers high sum assured rebate of Rs. 0.90 per thousand sum assured over 10
lakhs sum assured and below 25 lakhs sum assured. The rebate increases to Rs.
1.50 per thousand sum assured over 25 lakhs sum assured. The grace period of 30
days is allowed for payment of premium without any interest. The plan has the
waiting period of initial 90 days after the policy is issued and survival
period of 30 days after diagnosis of the critical illness. This means policy
will not pay you anything if you are diagnosed with any critical disease within
90 days from issue of the policy. More over no money will become payable unless
you survive for at least 30 days after you are diagnosed with the critical
illness. Premiums rates will not change in first five years of the policy but
are can be reviewed after five years with the prior the approval of IRDA.
Diseases
covered under the plan:
The
plan covers 12 major diseases such as Heart Attack, Stroke, Cancer, End stage
kidney failure, major organ transplant, Coronary Artery Bypass Surgery, Benign
Brain Tumour, Heart Valve Surgery, Motor Neurone Disease, Multiple Sclerosis, Coma
and Paraplegia. One needs to consult a medical practitioner to understand in
details the nature of diseases covered in detail and should also go through the
exact definition of the diseases to know when exactly the claim is payable. Pre
existing diseases are not covered and one should also read carefully the
exclusions mentioned in the policy before buying this product.
Looking
at stress level at work and present life style, one should buy critical illness
plan at the younger age. One should take minimum 50% of the cover of one’s life
insurance need as critical insurance cover. It is always very important to
disclose all the material facts in the proposal form while buying any insurance
plan to avoid the rejection of the claim at later stage. Aviva has started a
new trend and hope other will follow soon for the betterment of the society at
large.
This article first published at myiris.com on 26th June'2012.
