ICICI Pru iCare delivers ‘instant’ online term insurance, but watch out for some caveats

ICICI Prudential’s iCare is an innovative product offering ‘instant’ insurance—but it may not deliver in all cases. Medical tests are not needed for instant online purchase. But there is no guarantee that you’ll pass the ‘threshold risk’ online test to buy the product at a click 

ICICI Prudential Life Insurance’s iCare tries to address the major hiccup with the online term insurance buying process. The medical tests which online term insurance products require for all (or higher age groups) has been done away with this innovative product. There were issues like premium hike after medical tests which used to catch customers by surprise. This one-of-a-kind product will have no medical tests and no surprises of premium hike. But what is the catch?

If you don’t fit into the profile of the customer the insurer is looking for, you may not be able to buy the product online; which implies that it will not be available to that customer who does not ‘fit in’, for the quoted premium. After all, which insurance company will afford to take the risk of offering a low premium for a high-risk customer?

For this product, the buying process can be completed in many cases including customers who are smokers and drinkers. “The premium that you see on your quotation is the final annual premium that you will pay!” is what ICICI Prudential promises. But if you are suffering from some ailment like a heart problem or any other major illness, then the online buying cannot be completed.

There is a ‘threshold risk’ up to which the online buying process can be completed. The process is designed in such a way that it will ask many questions on different medical conditions, or smoking & drinking habits. If the online software decides the risk is beyond a threshold for a particular customer profile, online buying cannot be completed. If you are rejected, this message will greet you—“On the basis of details entered by you, we are unable to offer you the chosen product online.” One can argue that it is a good move by the insurer as underwriting without a medical test can be offered only to a certain extent.

According to the company, “The customer who is stopped from completing online buying will be offered offline products like ICICI Pure Protect.”

The online process may offer lower sum assured (SA) for higher age. For example, it offers Rs1 crore SA for a 40-year-old male, but only Rs60 lakh SA for a 60-year-old having the same income level. iCare Option II offers accidental death benefit with coverage equal to SA, subject to a maximum of Rs50 lakh. The existing online term plan iProtect is no longer on ICICI Pru’s website.

The plan has the following advantages:

  •  The value offered by the product is convenience of instant policy without medical tests and no hike in the quoted premium. It will certainly appeal to a number of customers.
     
  • Other insurance product reviews allow no medical check-up till 50 years, but this product is offered without a medical check-up for higher ages too, subject to the declaration of medical conditions by the customer, which have to be below the threshold risk allowed by the online process.  
     
  • It will be an advantage for people with some health problems who are allowed by the online process to complete the buying, as they will get a good deal on the premium.

But there are some disadvantages:

  •  The premium will be higher than the insurer’s own iProtect term insurance (which as mentioned above does not appear on ICICI Prudential’s website) due to convenience of no medical check-up and instant term life insurance offered by iCare.
  •  Moneylife tried buying the product online giving information as a potential buyer. Details were submitted as the prospect being a moderate smoker (8-15 packets a week) and moderate drinker (7-15 units of 30ml of alcohol per week). The premium is the same as that of a non-smoker. Customers who are healthy and have no vices can get a better deal with other online term plans.
  •  Again, a medical check-up is a good idea from the customers’ perspective. A check-up can’t catch all the medical problems and claims can still be rejected on non-disclosure grounds, but there is some proof with the customer in case the claim goes into litigation in case of claims rejection. Whether the product will have higher claim rejections due to lack of a medical test cannot be predicted at this time, but a customer aware of insurance intricacies would rather buy an insurance cover with a medical check-up rather than having the convenience of buying ‘instant’ life insurance.

Here is a comparison of the premiums for some online plans for SA of Rs1 crore and policy term of 20 years:


ICICI Pru iCare Product Details:


Comments
Poonam
1 decade ago
My experience with Aviva was good when I bought i-Life. The process took place in no time..
Madhusudan Thakkar
1 decade ago
This is a revolutionary product .The main feature is NO MEDICAL till the age of 50 up to sum assured of Rs.1.50 crore.Many people are charged extra premium[loading] on small pretext based on findings in Blood & Heart reports.This will be beneficial to those people.In the days and months ahead other Insurance companies will also come out with similar plans
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