Insurance
Chola Critical Healthline: Crowded market gets yet another critical-illness plan

Cholamandalam MS General Insurance’s product covers 10-12 critical illnesses, with no medical check-up until 55 years and lifetime renewal. But the premium is on the higher side

Cholamandalam MS General Insurance Company has launched its ‘Critical Healthline’ policy, which provides for a lump-sum amount if an insured is diagnosed with any of the specified critical illnesses. The claim will be settled on the basis of critical-illness diagnosis proof and the necessary survival period. It does not require any proof of hospitalisation or treatment. The policy terminates with payment of critical illness benefit. It excludes critical illnesses arising due to pre-existing diseases (PED).

There are a number of such products available from various insurers currently in the market. The main advantage of this product is that no medical check-up is required up to 55 years, and it also comes bundled with lifetime renewal.
But there are a couple of major drawbacks in Cholamandalam’s product.

First, the premium is on the higher side compared to other critical illness products. Second, different survival periods have been specified for policy-benefit eligibility. For cancer of specified severity; a first heart attack; open-chest CABG (coronary artery bypass graft); kidney failure requiring regular dialysis; major organ or bone marrow transplant; surgery of the aorta and primary pulmonary arterial hypertension, the insured needs to survive for 30 days. In case of a stroke (resulting in permanent damage) and motor-neuron disease (with persistent symptoms), survival period has to be 90 days. For multiple sclerosis and Parkinson’s disease, survival period is stipulated to be180 days.  

The product offers entry up to 65 years (with no medical check-up until 55 yrs) and a lifetime renewal facility. The ‘standard’ plan covers 10 critical illnesses, and the ‘advanced’ plan covers 12 critical illnesses—plus ambulance charges up to Rs1,000. Customers can choose from the two plan options for a sum insured of up to Rs10 lakh.

Here’s the comparison with other (similar) products available in the market:

Critical illness products have gained importance due to these diseases striking a number of people at a lower age than before, thanks to stressful work schedules and sedentary lifestyles. These diseases include cancer and cardiac attacks, among others. Unlike developed countries, India does not offer free medical cover to citizens, and this is a huge problem for the elderly after their retirement. To add to these problems, rising healthcare costs and medical expenses (other than hospitalisation) which are not covered by a mediclaim policy have made these critical illness products important. Like premium paid for a medical policy, critical illness product premium is eligible for tax exemption up to Rs20,000 under Section 80(D) of the Income-Tax Act.

 

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Bharti AXA Life Triple Health Insurance plan: How does it measure up?

Bharti AXA’s plan offers cover of a maximum of three times the sum assured under the policy, while covering three critical illnesses. The premium is waived by the insurance company after payment for the first critical illness. But it comes with some riders

Bharti AXA Life Insurance has launched its ‘triple benefit’ critical illness plan, called the Triple Health Insurance plan. This plan covers 13 critical illnesses that have been classified into three groups. The policy pays the sum assured (SA) on the diagnosis of one of the illnesses. The policy continues and can pay for additional critical illnesses as long as they are in other groups. The maximum coverage is for three critical illnesses.

As with all the insurance plans being offered by various insurance industry players, this one also has its advantages and shortcomings. Here are few of the advantages:

  • The plan offers cover of a maximum of three times the SA under the policy. This is a distinctive feature of the product, as other critical illness policies end, once the claim is paid for a single critical illness.
     
  •  Future premium payable by the policyholder is waived. The policy continues as the policyholder is still covered for illnesses under the remaining two groups.
     
  • Premium rates are guaranteed for the first three policy years.

However, the plan does suffer from a few shortcomings.

  •  The product will not pay a claim if the diagnosed critical illness falls in the group under which the policy has already paid out. Group ‘A’ includes conditions like heart attack, coronary artery bypass, kidney or heart transplants, kidney failure and paralysis. Group ‘B’ has coma, multiple sclerosis, liver or lung transplants. Group C covers cancer, benign brain tumours and bone marrow transplants.
     
  •  There has to be a gap of 365 days between the diagnoses of two illnesses for the subsequent claims to be admissible.
     
  •  The product is available for customers with no pre-existing illnesses at the time of application.
     
  •  The total policy and premium paying term is 15 years—which is unlike most critical illness products, which have lifelong renewal.

HOW THE PLAN MEASURES UP AGAINST OTHER SIMILAR PRODUCTS

There will be a waiting period of 90 days from the policy’s inception. The policyholder needs to survive for 30 days after the diagnosis of the critical illness to claim policy benefit. This is standard in critical illness products.
The minimum and maximum ages at entry are 18 and 50, respectively, with the upper age limit at maturity being 65 years. You have to buy a cover of at least Rs2 lakh, while the highest cover available under the policy is Rs30 lakh.

The product offers option of return of premium at increased premium. It gives survival benefit and a death benefit in case you have made no claims during the term. The policyholder gets 15 times the first year premium on survival. In case of death, the nominee gets a sum equal to the first-year premium multiplied by the number of years the policy has completed.

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Mediclaim Portability: Some gain, a lot of pain

Watch out for what IRDA did not say

The Insurance Regulatory and Development Authority (IRDA) has finally issued new guidelines for the implementation of health insurance portability from 1 October 2011. Although these address some of the issues, there are several conditions that will make portability fall through the cracks, especially those related to no-claim-bonus (NCB) and pre-existing...

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