LIC New Critical illness Benefit Rider

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LIC New Critical Illness Benefit is a non-linked policy that can be purchased by the insurer with base plans.  The policy can be purchased at the starting or during the policy term of the base policy. In recent times, medical treatments can be physically and mentally draining while also putting financial pressure on the individual.  The insurance policy that provides critical illness helps the insurer in paying treatment and hospital bills. Thus, the insurer and family are benefitted from cash flow during a crisis.

In case, the policyholder attains death, the beneficiary or nominee will receive the death benefit and assured sum under the rider. The expiry of the rider is dependent on the end term of the base plans.

Plan Coverage

The types of critical illnesses that are covered under the rider include cancer, benign, brain tumor, heart replacement, burns that are third-degree burns, blindness, permanent paralysis of limbs, and others. If the insurer is diagnosed with the critical illness mentioned above, LIC shall pay a maximum of 25 Lakhs (INR). This benefit can be only reaped if the base policy and the rider are inactive states.  LIC will pay the compensation only once during the policy term.

Features of LIC New Critical Illness Benefit

After taking the policy, the insurer has 15 days for reviewing terms and conditions. If the policyholder wants to return the plan, he will be refunded with the premium already paid for the rider. However, minimum risk premiums, medical examination, and stamp fees will be deducted from the refund.

The grace period of rider premium payment is the same as the base policy. In case of a delayed payment of premiums for the rider, the insurer will get a minimum of 30 days on yearly, quarterly, and half-yearly modes. If the payment mode is monthly basis, then the insurer will a maximum of 15 days, after which the policy will lapse.

The rider can be revised on the terms and conditions of the base policy. The insurer has the option of reviving the policy within 2 years from the first unpaid premium. To revive the rider, the insurer must submit a written request along with the payment of unpaid premiums.  Along with the request, the insurer must pay insurability and certificate of health.

The Critical Benefit can only be reaped if the insurer has been diagnosed with the critical illness after 90 days. The 90 days usually start from policy commencement dates. Also, the insurer must survive the illness for more than 30 days after diagnosis of critical illness. Besides, the insurer will not receive any surrender value. If the insurer is surrendering the base policy, then the return of the premium will be done. Thus, the policyholder must pay full premiums for the first two years within the PPT of 10 years.

The critical illness benefit will collapse if a claim has been paid once in the policy term. Also, if Rider has attained expiry date or diagnosis within waiting period has occurred, Critical Benefit Illness Rider will be terminated.  Besides, if the base policy is expired or conversion to paid-up policy has been done.

The Critical Illness Benefit Rider is exempted from taxes under sections 80 D of the Income Tax Act.

Sum Assured under Critical Illness Benefit

Description Sum Assured
Total amount realizable The insurer will receive a minimum of 1 Lakhs with a maximum of 25 lakhs
Premium Policy Term It is like the base plan that 5- 35 years
Policy Terms Like the base plan, ranging from 5- 35 years
Mode of payment for the premium Monthly, yearly, half-yearly and quarterly

 

Rates for the premium is under guarantee for five years after it which might change depending on the experience of critical experience.

Exclusions from LIC Critical Illness Benefit

The listed types of critical illness are not covered within the rider

  • Occurrence of death within 30 days of critical illness diagnosis
  • Recognition of critical illness within the waiting period that is 90 days
  • If the policyholder has pre-existence HIV/ AIDs
  • If the insurer fails to seek on-time medical advice of treatment.
  • Self-inflicted injuries, attempting suicides, or involvement.
  • Exposure to nuclear and radiation.

Frequently Asked Questions

  1. Should I consider a smart choice for investing in Critical Benefit Rider?

You never know which circumstance you might face. A protection plan will help in combating unforeseen scenarios. Also, the claim settlement by LIC, however the decision is pending on your requirement and needs.

  1. What do you mean by Critical Illness Benefit Rider?

It can be referred to as an add-on benefit that pays the policyholder on being diagnosed with terminal business.

  1. What are the tax benefits?

The premiums paid for the rider are exempted under section 80C.

  1. What is the surrender, and maturity value?

Since it is acquired with the basic plan, hence there is no surrender or maturity value. If the policyholder wishes to return the base plan, then partial refunds are possible for the rider. However, the premium must be regularly paid by the policyholder.

  1. What are the eligibility criteria?

Minimum Eligibility is 18 years while the maximum is 65 years. At the time of claiming the benefit, the insurer must not be above 65 years.

  1. What is the grace period for the rider?

The policyholder is provided a grace period of 15-30 days depending on the modes of premiums which is monthly, yearly, half-yearly or quarterly.

  1. How many times, the rider can be claimed during the policy period?

The rider can be claimed only once during the policy term of the base plan.

  1. Is there any free look-up period?

Yes, there is a free-look period of 15 days for returning the policy.

  1. What are the survival benefits?

The policyholder must survive for more than 30 days after the critical illness has been diagnosed.

  1. What are the documents required?

The documents required claim form filed and signed, original policy papers, medical certificates, and confirmatory investigations

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