o
Insurers in case of critical illness riders
specify terms & condition along with exclusions.
o
Benefit of the rider will not be payable under
such terms condition.
o
Waiver of premium (WOP)
§
Waives future premiums of policy holder in event of disability.
§
Insurance company always specifies the product
with which this rider is
§
Available
§
WOP rider comes with the exclusions & terms
condition.
o
Some other riders offered by some insurance
companies are
§
Hospital care rider plan fixes an amount on a
daily basis in event of hospitalization
§
The rider fixes an amount at the time when the
policy is taken.
§
An insurance company may pay the actual cost for
the treatment.
§
Amount may be paid for the number of days
insured is hospitalized.
§
Amount is irrespective of actual amount spent in
hospitalization.
§
Amount is additional amount paid apart from lump
sum that maybe paid for surgery and/or critical illness.
§
The rider is similar to the individual policy
mentioned above.
o
Guaranteed insurability rider gives insured
right to increase cover in response to life events which are (a) marriage, (b)
child birth etc.
Ø
Benefits of riders
o
Additional cover
o
nominal cover
o
customization – as per preference of customer
o
flexibility
o
an per the IRDA regulations issued in april 2002
and amended in October 2002:
§
the premium on all riders relating to health or
critical illnesses, in case of term or group insurance products shall not
exceed 100% of the premium of the base policy;
§
the premium on all the other riders put together
should not exceed 30% of the premium on the base policy; and
§
the benefits arising under each of the riders
shall not exceed the sum insured under the base policy.
Ø
Annuities
o
Annuities are a reverse of life insurance.
o
In life insurance insurer starts paying on the
death of the insured whereas in annuity insurer stops paying upon death of
annuitant.
o
Annuity is a series of regular payments from an
annuity provider to an annuitant,
Ø
Annuity can either be immediate or deferred.
o
Immediate annuities become payable (vest)
immediately after they have been purchased with a lump sum,
