In your interest.
Online Personal Finance Magazine
No beating about the bush.
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:
But there are some disadvantages:
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:
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.
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:
However, the plan does suffer from a few shortcomings.
HOW THE PLAN MEASURES UP AGAINST OTHER SIMILAR PRODUCTS