An Assignment On Practical Application With Reference to Financial Planning Study Of

Comparison of Critical Illness Rider

Faculty Guide: Prof. Pinakin Jaiswal Submitted By: Vishal Rajyaguru 107110592149 Bhavesh More 107110592150 Dixita Soni 107110592159

Section : A
M.B.A II, SEMESTER - III Dr. J. K. Patel Institute of Management Vadodara Parul Group of Institutes Affiliated to Gujarat Technological University.

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Overview
A critical illness policy provides protection from the life threatening illnesses, which can hamper your life style. With a critical illness cover you can secure yourself from such contingencies.

This policy which pays the sum insured as a lump sum once you are diagnosed with any one of the critical illness covered by the policy.

Critical Illness Rider A critical illness policy provides a lump sum benefit if you are unfortunate enough to contract one of the several covered critical illnesses such as a paralytic stroke, organ failure, cancer, etc. The difference between this and a insurance-mediclaim policy is that a lump sum is paid irrespective of actual expenditure incurred on the policy unlike a mediclaim policy where only the eligible hospitalisation expenditure is covered. In short essentially the mediclaim policy helps you in dealing with the hospitalisation costs attached to all illnesses (including critical illnesses) whereas the Critical illness policy provides you a lump sum that can probably help you generate income to replace the loss in income as a result of the critical illness. The policy may also be structured to pay out regular income and the payout may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation. The policy may require the policyholder to survive a minimum number of days (the survival period) from when the illness was first diagnosed. The survival period used varies from company to company, however, 28 days and 30 days are the most common survival periods used. The contract terms contain specific rules that define when a diagnosis of a critical illness is considered valid. It may state that the diagnosis need be made by a physician who specialises in that illness or condition, or it may name specific tests, e.g. EKG changes of a myocardial infarction, that confirm the diagnosis. In some markets, however, the definition of a claim for many of the diseases and conditions have become standardised, thus all insurers would use the same claims definition. The standardisation of the claims definitions may serve many purposes including increased clarity of cover for policyholders and greater comparability of policies from different life offices. For example, in the UK the Association of British Insurers (ABI) has issued a Statement of Best Practise which includes a number of standard definitions for common critical illnesses. There are alternative forms of critical illness insurance to the lump sum cash payment model. These critical illness insurance policies directly pay health providers for the treatment costs of critical and life-threatening illnesses covered by the policyholders 2|Page

insurance policy, including the fee of specialists and procedures at a select group of highranking hospitals up to a certain amount per episode of treatment as set out in the policy. Factors to be considered : A critical illness policy is more expensive than a life insurance policy for the same sum insured at the same age simply because the odds of contracting a critical illness are higher than the odds of the insured person's death. Look for the critical illnesses that are covered especially if you have a family history of any such disease. Getting a critical illness policy from an insurance company is a good option since renew ability is ensured by IRDA regulation (except in the case of fraud, misrepresentation, etc.) till the maximum age indicated in the prospectus given to you at the time of taking the first policy. Premiums however will go up from year to year as indicated in the same prospectus as you age.

Keep a copy of all documents submitted to the insurance company for your future reference. Any promise made by the agent or even an official of the insurance company has no value unless it is in writing or at least on email. So if you are basing your decision on any such promise make sure you get it in record in some form.

Sample of diseases covered: Cancer Multiple sclerosis Paralysis Coronary artery bypass surgery Major organ transplant Primary pulmonary arterial hypertension First heart attack Stroke Kidney failure Arota graft surgery Basic Exclusion: Any critical illness for which care, treatment, or advice was recommended or which was first manifested or contracted before Any critical illness diagnosed within the first 90 days Death with in 30 days following the diagnosis of the critical illness Presence of HIV/AIDS infection

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Treatment arising from or traceable to pregnancy or childbirth, including caesarean section, birth defects War, invasion, act of foreign enemy, terrorism, hostilities (whether war be declared or not), civil war, rebellion, revolution Naval or military operations of the armed forces or air force and participation in operations requiring the use of arms or which are ordered by military authorities for combating terrorists, rebels and the like, any natural peril Consequential losses of any kind, be they by way of loss of profit, loss of opportunity, loss of gain, business interruption etc. Importance: Life insurance policies cover the risk of death of the policy holder during the coverage period. Besides the basic benefit, life policies offer a number of optional benefits to cover various other contingencies. One such useful addition is the critical illness benefit. This benefit is sometimes offered as a standalone product also. Under this benefit, the life insurer pays a lump-sum amount in the event of the life assured getting diagnosed with any of the critical illnesses covered by the policy during the period of coverage. The amount paid is typically equal to or less than the sum assured under the base policy. The number of diseases covered varies from insurer to insurer, but cancer, stroke, coronary artery bypass, major organ failure, paralysis, etc, are generally covered. Critical illness benefit is not an alternative to a health insurance or a 'mediclaim' policy offered by non-life insurance companies. In the case of a mediclaim, the benefit is Limited to the expenses incurred on treatment, whereas the lump-sum benefit offered by a critical illness cover does not impose any such restriction. In case of mediclaim, the benefit amount is restricted to the maximum of the incurred expenses or the sum assured, whereas in the case of a critical illness benefit, the complete sum assured is paid irrespective of the expenses incurred. A critical illness benefit complements the mediclaim benefit. While mediclaim takes care of hospitalisation expenses, critical illness benefit can be used to cover extra costs that may be incurred while seeking treatment for a dreaded disease. Benefits, conditions of critical illness rider The critical illness benefit covers illnesses that are on a pre-determined list of the policy offered by an insurer. The number of illnesses covered differs from insurer to insurer. Hence, it is necessary for the life assured to understand the benefits and conditions offered by the insurer thoroughly before selecting the benefit. The critical illness benefit will not cover any pre-existing critical illness or congenital conditions. There would be a waiting period for making a claim a claim can only be made if a critical illness is diagnosed after the waiting period is over. There will also be a survival clause. The benefit is payable only if the life assured survives a certain period after being diagnosed with the critical illness. If death occurs before the predefined period after diagnosis, the benefit will not be payable.

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Types of critical illness benefits Primarily, insurers offer two types of critical illness benefits non-accelerated benefit and accelerated benefit. In the case of core critical illness cover, the lump-sum benefit payable is independent of the basic benefit. That is, the payment of critical illness benefit does not affect the benefit payable under the base policy. In the case of accelerated critical illness benefit, the benefits payable under the base policy will be accelerated. In other words, the lump-sum amount paid under the critical illness benefit will reduce the benefit payable under the base policy to the extent of payments made under the critical illness benefit. Choosing a critical illness benefit While purchasing a critical illness benefit, following points should be kept in mind: Figure out how you want the critical illness benefit whether as an add-on benefit along with a basic benefit or as a standalone cover. Also, determine if you require a core benefit or an accelerated benefit Read the brochure and the key features document carefully to understand what is covered and what is not under the policy Shop around and weigh the benefits vis-? -vis price among insurers offering the benefits. The cheapest policy may not always be the best; it may not cover most of the illnesses Check whether the premiums are guaranteed or reviewed periodically Check for the waiting period and survival period lesser the period, the better It pays to be honest and disclose any existing illnesses. This may lead to higher premium, but would be helpful at the time of lodging a claim It is important to disclose all material facts to the insurer at the time of application. During a claim, if the insurer detects suppression of any facts that would have influenced the insurer in underwriting the application, the insurer may not only repudiate the critical illness benefit, but also cancel the existing base policy.

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Bajaj Allianz (Critical illness rider):

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Finserv Limited and Allianz SE. Both enjoy a reputation of expertise, stability and strength. This joint venture company in corporates global expertise with local experience. The comprehensive, innovative solutions combine the technical expertise and experience of the 110 year old Allianz SE, and in depth market knowledge and good will of Bajaj. Competitive pricing and quick honest response have earned the company the customer's trust and market leadership in a very short time. A critical illness plan means you can insure yourself against the risk of serious illness in much the same way as you insure your car and your house. It will give you the same security of knowing that a guaranteed cash sum will be paid if the unexpected happens and you are diagnosed with a critical illness. Illness Rider Cover following disease: 1) Cancer 2) Coronary Artery Bypass Surgery 3) First Heart Attack(Myocardial Infarction) 4) Kidney Failure 5) Major Organ Transplant 6) Multiple Sclerosis 7) Stroke 8) Aorta Graft Surgery 9) Paralysis 10) Primary Pulmonary Arterial Hypertension Advantages of Critical Illness cover 1. The benefit amount is payable once the disease is diagnosed meeting specific criteria and the insured survives 30 days after the diagnosis. 2. The insured receives the amount as lump-sum so that he can plan the treatment accordingly. 3. Expenses like donor expenses in a transplant surgery, which are not covered under normal health insurance policy, can be paid out of the amount received under this cover both in India & abroad. 4. Claims procedure: The insured needs to submit the claim form along with certificate from the specialist confirming occurrence of the critical illness. 5. Premium paid is exempt under section 80-D of Income Tax Act. Insured Breath (dyspnoea) especially during exercise, chest pain, and fainting episodes. The exact cause of primary pulmonary hypertension is unknown.

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Key Features The product is offered from 6 to 59 years. Medical examination may be required in some cases based on The age and the benefit amount opted by the proposer. Very competitive premium rates. Insured can opt for Sum Assured from 1,00,000 to Rs. 50,00,000. Exclusions 1. Any critical illness for which care, treatment, or advice was recommended or which was first manifested or contracted before 2. Any critical illness diagnosed within the first 90 days 3. Death with in 30 days following the diagnosis of the critical illness 4. Presence of HIV/AIDS infection 5. Treatment arising from or traceable to pregnancy or childbirth, including caesarean section, birth defects 6. War, invasion, act of foreign enemy, terrorism, hostilities (whether war be declared or not), civil war, rebellion, revolution 7. Naval or military operations of the armed forces or air force and participation in operations requiring the use of arms or which are ordered by military authorities for combating terrorists, rebels and the like, any natural peril 8. Consequential losses of any kind, be they by way of loss of profit, loss of opportunity, loss of gain, business interruption etc The details furnished above do not constitute the entire terms and Conditions.

ICICI Prudential Life Insurance:

Key benefits of ICICI Pru Crisis Cover Receive benefit amount paid on diagnosis or undergoing any of the 35 diseases and procedures (critical Illnesses), TPD or death Long term coverage up to 75 years of age Coverage continues even after claiming benefit on select critical illnesses Receive lump-sum benefit amount irrespective of actual billing Receive benefit amount in addition to payment received from other medical insurance plan Eligible for tax benefits on premium paid u/s 80C & 80D of the Income Tax Act,1961* 7|Page

Coverage under the policy 1. Critical Illness Benefit (CIB) This policy provides cover against 35 critical illnesses related to most body organs and senses. These critical illnesses are divided into two groups, depending on the benefit amount payable.

Group 1: Critical Illnesses with full payout advantage In the event of diagnosis or undergoing any of the diseases and procedures (critical illnesses) covered under this group, the benefit amount payable is equal to the full Sum Assured chosen under the policy. After the payout, the policy ceases to exist

Critical Illness With Full Payout Advantage

Apallic Syndrome Benign Brain Tumour Blindness Brain Surgery Cancer Chronic Lung Disease Coma Coronary Artery Bypass Surgery End Stage Liver Disease Heart Attack Heart Valve Surgery Kidney Failure Loss of Independent Existence Loss of Limbs Major Burns Major Head Trauma Major Organ Transplant Paralysis Stroke Surgery to Aorta Terminal Illness

Group 2: : Critical Illnesses with coverage continuation advantage In the event of diagnosis or undergoing any of the diseases and procedures (critical illnesses) covered under this group, if the Sum Assured is greater than Rs. 10 lakhs, then benefit amount payable will be Rs. 10 lakhs. On payment of the benefit, the cover will continue for the balance Sum Assured, for the remaining critical illnesses, TPD or death. The premium will also be revised proportionately on the following policy anniversary, for the reduced Sum Assured. If the Sum Assured is less than Rs. 10 lakhs, then benefit amount payable will be the full Sum Assured and the policy will close.

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Critical Illness With Coverage Continuation Advantage Angioplasty

+

Loss of Speech Medullary Cystic Disease Motor Neuron Disease Multiple Sclerosis Muscular Dystrophy

Parkinsons Disease Polio Myelitis Primary Pulmonary Hypertension SLE with Lupus Nephritis

Alzheimers Disease Aplastic Anaemia Cardiomyopathy Deafness

2. Death Benefit (DB) In the unfortunate event of death during the policy term, the Sum Assured will be paid to your nominee. There is no waiting period applicable for claiming this benefit. 3. Total & Permanent Disability Benefit (TPDB) Full Sum Assured will be paid in case you suffer from Total & Permanent Disability (TPD). This benefit is payable even if TPD occurs because of an accident during the waiting period.

ICICI Pru Crisis Cover at-a-glance

Minimum / maximum entry age Minimum / maximum policy term Maximum coverage ceasing age Minimum / maximum Sum Assured (CIB, DB or TPDB) Minimum yearly premium Premium payment frequency Maturity benefit Tax benefit

18 years - 60 years 10 years - 50 years 75 years Rs. 3 lakhs - Rs. 20 lakhs Rs. 2,400 Yearly, half-yearly, monthly No maturity benefit is payable Premium paid is eligible for deduction under section 80C & section 80D*

ICICI Pru Crisis Cover does not cover

A. No benefit in respect of Critical Illness Benefit (CIB) or Total & Permanent Disability Benefit (TPDB) will be payable if it has occurred due to sickness within the first 6 months of the policy or first 3 months of the policy reinstatement date where the policy has lapsed for more than 3 months. 9|Page

B. No CIB & TPDB will be payable for the following services / conditions tests / treatments: 1. Pre-existing illnesses, unless otherwise stated in the proposal form and specifically accepted by the company and endorsed thereon. 2. Existence of any STD, AIDS or HIV and its related complications. 3. Self-inflicted injury, use of intoxicating drugs or alcohol, war, riot invasion, breach of law, criminal acts and radioactive contamination due to nuclear accident. 4. Avocations, hazardous sports / activities and hobbies, aviation other than as a fare paying passenger in a commercial licensed aircraft. 5. Pregnancy or childbirth or treatment of a donor for the replacement of an organ and complications arising from them. 6. Any treatment other than allopathy/western medicine. 7. Diagnosis and treatment outside India except USA, Canada, countries of the European Union, Dubai, Switzerland, Japan, Hong Kong, Singapore, Brunei, Australia, New Zealand, UAE and Malaysia. The Company may, at its discretion, review the above list of accepted foreign countries from time to time, with prior approval from Authority. 8. Failure to seek or follow reasonable medical advice in order to circumvent the waiting period or other conditions and restrictions applying to the Company. 9. Taking part in any act of a criminal nature. Met Life Insurance: At MetLife, we want our customers to get the maximum out of their lives. Be it in terms of making their dreams come true or getting the best out of their insurance plan. With this in mind, we created Met More which allows you to customize your life insurance plan. So that it can be tailored to meet the unique needs of you and your family members. MetMore offers you a choice of riders which are optional contracts that allow you to enjoy additional benefits. They are always attached to the basic policy at the time of purchasing it, and cannot be bought separately or independently. Each rider comes with its own premium rates and separate policy conditions. The premium, nature and characteristics of the rider are based on the base policy to which the rider is attached.

Plan Overview

No one likes to think about the possibility of suffering a critical illness like cancer, heart attack and stroke etc. It is something that many of us assume will not happen to us. In the daily grind of activities, one ends up never being prepared for such an eventuality. 10 | P a g e

MetLife offers a Critical Illness Rider which provides payment of an additional amount on the diagnosis of as many as 10 critical conditions. You can have the money to pay for the illness when you need it rather than after the treatment is over, Thus helping you protect yourself against any health or lifestyle risk. 1. Insured critical illness conditions. 2. Heart attack. 3. Stroke. 4. Cancer. 5. Surgery to coronary arteries. 6. Kidney failure. 7. Major organ transplant. 8. Aorta surgery. 9. Blindness. 10. Heart valve replacement. 11. Paraplegia.

Features: Minimum Entry Maximum Entry Maximum age at Maturity Minimum Sum assured Maximum Sum assured Waiting Period: No amount will be payable under this benefit in respect of critical illness diagnosed within a period of 90 days from the date of issue or reinstatement of the policy. Survival Period: The benefit amount under this rider is payable only if the insured survives for the period of at least 30 days from the date of diagnosis of the insured critical illness . 18years 55years 60years Rs. 50000 Rs. 1000000

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Comparison Between ICICI , BAJAJ Allianz, And MetLife Features

Minimum Entry Maximum Entry Minimum Policy Term Maximum Policy Term Maximum Coverage Ceasing Age Minimum Sum Assured Maximum Sum Assured Tax Benefit

ICICI Prudential Crisis

18years 60years 10years

Bajaj Allianz
18years 65years 6years

MetLife
18years 55years 10 years

50 years

59 years

60 years

75 Years 3lakhs

80years 1lakhs

Once the benefit is paid 50000Rs

20lakhs Premium is eligible for u/s 80-c of income tax act 35 Lump sum Age, Sum assured, & cover. 6Months NO Up to 40 years

50lakhs Premium is eligible for u/s 80-c & 80-D of income tax act 10 Lump sum Age, Sum assured, Gender & cover. 3Months NO Up to 45 years

10lakhs Premium is eligible for u/s 80-c of income tax act 11 Lump sum Age, Sum assured, & cover. 90Days Available Up to 45 Years

Disease Covered Benefit Premium Base No Benefit In First Loan Facility No Medical Checkups Free Look Period No Death benefit up to First Waiting Period

15Days 3 Months 6 Months

10Days 30days 2 Years

10Days 30days 90 Days

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Conclusion:
As we know, there are so many policys available in India And some of them provide the Critical illness rider. Critical illness rider is very important to safeguard against the Disease and get protected. There are different feature in the policy which we need to be consider while choosing Critical illness rider. It is also the part of our life insurance which Provide us the Protection against illness. So, we have to choose very carefully critical illness rider In our life insurance policy. It is different from the Health Insurance.

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Bibliography:

http://www.apnapaisa.com/insurance/life-insurance-india/index.html http://www.apnapaisa.com/insurance/critical-illness-insurance-india/index.html http://www.metlife.co.in/MetLifeRider_Critical_Illness.aspx http://www.apnapaisa.com/search/q/critical-illness-rider-covered-under-metlifesuraksha.html http://www.iciciprulife.com/public/Brochures/WOPCI_Brochure_7.pdf http://www.iciciprulife.com/public/Others/Riders.html http://www.apnapaisa.com/insurance/life-insurance-india/Critical-illness-benefitrider.html http://www.bajajallianz.com/Corp/life/riders.jsp http://www.bajajallianz.com/Corp/life/additional-rider-benefits.jsp http://www.indianinsurance.com/showthread.php/457-LIC-India-Policies-LIC-IndiaRiders http://www.i-save.com/generalinsurance/healthinsurance.aspx?gclid=CJMtcKIk60CFY4a6wodEnBCmw

http://www.policybazaar.com/life-insurance/life-insurance-india.aspx

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