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ICICI iprotect Term insurance with coverage for 34 critical illnesses

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13 May, 2021 by  Kovid Sinha

I'm considering buying ICICI Prudential iprotect Term insurance with coverage for 34 critical illnesses. This is a link to the product: https://www.iciciprulife.com/term-insurance-plans/iprotect-smart-term-insurance-calculator.html


For my age, they require me to pay a premium of 93000 per year for a coverage of 1 crore rupees. while the premium is very high, the compelling highlight of the product is that I get paid 1 crore rupee as soon as I am diagnosed with one of the 34 critical illnesses covered by this insurance. Apart from this they also promise to pay an amount of 83000 per month for 10 years after the death of the insured.


They claim a payout percentage of 97%+


While I fully trust ICICI and HDFC as organizations, could there be pitfalls that I could be blind to?

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Term Life Insurance
Health Insurance

2 Answer

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14 May, 2021

There are 8 or 9 variants within ICICI Prudential iProtect term plan. Some give lumpsum payout of Sum Assured at the time of death of Insured, some give a lumpsum payout + constant monthly income, some give lumpsum payout + additional increasing monthly income to beat inflation, there are some that give a staggered payout of the total Sum Assured over 10 to 15 years, etc. One needs to carefully assess their family's financial needs & ability to manage money before choosing the right variant.


All of them are good. No Pitfalls!


There are similar Term products from HDFC Life & Max Life. Their claim settlement ratio is also upwards of 95%. Do compare these products to buy what is right for you at the best price.


Good wishes!

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16 May, 2021
Kautilya Bhardwaj

[Disclaimer: Only personal experience, no recommendations]


Hi Kovid,

I'm currently in a transition phase for my term life insurance policy from ICICI prudential's iProtect smart term plan to Max life's smart secure plus plan. Here are my reasons:

  1. While ICICI's critical illness rider is cost efficient & provides sum insured = term life SI, it is an accelerated rider, which means once rider's payment is made the term insurance's SI gets deducted by this amount. For example, if you have 1Cr policy & 25L critical illness benefit rider, post payment of critical illness benefit, your policy's insured amount gets down to 75L only. This doesn't solve my purpose, and apparently with your question as well, I think you also missed this accelerated part.
  2. I opted for coverage till a higher age, hence more premium outgo :(
  3. As I bought my first policy during my first job, it's SI was on a lower side & I was thinking of enhancing it from some time now.
  4. ICICI's plan didn't had waiver of premium in case of disability. It only does in case of terminal illness.

Further max life's critical illness rider also has it's own pros & cons, viz,

Pros:

  1. It offers coverage for 64 critical illnesses, best in industry.
  2. It is not accelerated. Hence, extra SI.
  3. Rider's validity is till the term insurance's coverage age. While, ICICI's CI rider has validity for max 30 years from policy purchase date.

Cons:

  1. As it is not an accelerated policy, it's premiums are much higher.
  2. SI for this rider is capped at max 30L.


Also, personally I never feel good about deferred payment of SI to the nominee despite of this being a slightly cheaper option because:

  1. Even if my nominee is not that financially savvy, I can restrict usage of the cover amount using my will. I'm planning for 50% annuity & 50% index investing, of which 25% shall be converted into an annuity after every 10 years. Just simple maths & we got inflation proof coverage till the end of life of our nominee.
  2. We never know if at the time of demise we'll be having any outstanding liabilities or not. Deferred payment may not serve the coverage for those liabilities. In which case what is the use of posting this high premiums every year.
  3. More often than not, every transaction comes with a few human interactions, documentations, & time involved. I don't want my nominee to circle around insurance company's office, emails, etc more than once.


Rest assured, I hope your policy cover matures without any claims. Wish you best for your Health & happiness.


Kautilya Bhardwaj

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17 May, 2021
Kovid Sinha
Hi Kautilya, Appreciate you taking the time to share your views in detail. thank you.
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