final report on fp

8/2/2019 Final Report on Fp

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An Assignment

On

Practical Application With Reference toFinancial Planning

Study Of

Comparison of Critical Illness RiderFaculty Guide: Submitted By:

Prof. Pinakin Jaiswal 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 InstitutesAffiliated 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 amyocardial 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
http://www.apnapaisa.com/insurance/http://www.apnapaisa.com/insurance/health-insurance-india/http://www.apnapaisa.com/insurance/health-insurance-india/http://www.apnapaisa.com/insurance/


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insurance policy, including the fee of specialists and procedures at a select group of high-

ranking 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 prospectusas 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 attackStroke

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
http://www.apnapaisa.com/insurance/life-insurance-india/http://www.apnapaisa.com/insurance/life-insurance-india/


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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 theriskofdeathof 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 ahealthinsurance 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 isrestricted 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-existingcritical illness or congenital conditions. There would be a waiting period for

making a claima 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 pre-

defined 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, thebenefits payable under the base policy will be accelerated.

In other words, the lump-sum amount paid under the critical illness benefit willreducethe

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, followingpointsshould be kept in mind:

Figure out how you want the critical illness benefit

whether as an add-on benefit along witha 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*


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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 Coronary Artery Bypass Surgery Major Burns

Benign Brain Tumour End Stage Liver Disease Major Head Trauma

Blindness Heart Attack Major Organ Transplant

Brain Surgery Heart Valve Surgery Paralysis

Cancer Kidney Failure Stroke

Chronic Lung Disease Loss of Independent Existence Surgery to Aorta

Coma Loss of Limbs 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 Parkinsons Disease

Alzheimers Disease Medullary Cystic Disease Polio Myelitis

Aplastic Anaemia Motor Neuron Disease Primary Pulmonary Hypertension

Cardiomyopathy Multiple Sclerosis SLE with Lupus Nephritis

Deafness Muscular Dystrophy

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 18 years - 60 years

Minimum / maximum policy term 10 years - 50 years

Maximum coverage ceasing age 75 years

Minimum / maximum Sum AssuredRs. 3 lakhs - Rs. 20 lakhs

(CIB, DB or TPDB)

Minimum yearly premium Rs. 2,400

Premium payment frequency Yearly, half-yearly, monthly

Maturity benefit No maturity benefit is payable

Tax benefitPremium paid is eligible for deduction undersection 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.


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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, andcannot 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.


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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 18years

Maximum Entry 55years

Maximum age at Maturity 60years

Minimum Sum assured Rs. 50000

Maximum Sum assured Rs. 1000000

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.


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Comparison Between ICICI , BAJAJ Allianz, And MetLife

Features ICICI Prudential

Crisis

Bajaj Allianz MetLife

Minimum Entry 18years 18years 18years

Maximum Entry 60years 65years 55years

Minimum Policy

Term

10years 6years 10 years

Maximum Policy

Term

50 years 59 years 60 years

Maximum CoverageCeasing Age

75 Years 80years Once the benefit ispaid

Minimum Sum

Assured

3lakhs 1lakhs 50000Rs

Maximum Sum

Assured

20lakhs 50lakhs 10lakhs

Tax Benefit Premium is eligible

for u/s 80-c of

income tax act

Premium is eligible

for u/s 80-c & 80-D

of income tax act

Premium is eligible

for u/s 80-c of

income tax act

Disease Covered 35 10 11

Benefit Lump sum Lump sum Lump sum

Premium Base Age, Sum assured, &

cover.

Age, Sum assured,

Gender & cover.

Age, Sum assured, &

cover.

No Benefit In First 6Months 3Months 90Days

Loan Facility NO NO Available

No MedicalCheckups

Up to 40 years Up to 45 years Up to 45 Years

Free Look Period 15Days 10Days 10Days

No Death benefit up

to First

3 Months 30days 30days

Waiting Period 6 Months 2 Years 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 theDisease 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-metlife-

suraksha.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-benefit-

rider.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-India-Riders

http://www.i-save.com/generalinsurance/healthinsurance.aspx?gclid=CJ-

MtcKIk60CFY4a6wodEnBCmw

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