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:

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    COMMENTS

    Poonam

    8 years ago

    My experience with Aviva was good when I bought i-Life. The process took place in no time..

    Madhusudan Thakkar

    9 years 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

    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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