For those who are new to insurance or may already have insurance policy in hand, it is important to know and understand the benefits/terms in order to ensure the policy meets your needs. Actual insurance policy may have specific terms and definitions but we are going to explain the benefits/terms in a general and simpler way so that you will have an idea of what you need to look out for before buying any insurance policy.
Generally, you have a basic plan in your policy. It covers a lump sum amount (so called sum assured) for death or Total Permanent Disability (TPD) benefits. TPD benefits generally have an age limit till 65 years old.
Critical Illness (CI)
It is usually a rider attached to your basic plan. You will be paid a lump sum amount if you are diagnosed with CI stated in the critical illness listing (usually there are 36 CI). You may take the critical illness insurance as either an accelerated or additional benefit.
Accelerated benefit means the pay-out amount will be sharing with the death benefit whereas additional benefit is separated from the death benefits. Unsurprisingly, the insurance cost of accelerated CI will be cheaper than an additional CI.
It is commonly referred as Medical Card. It covers the medical expenses for hospitalisation. The benefits vary depending on the insurance plans as well as insurance companies. Things that you should be aware of are Room and Board rate, annual limit, lifetime limit and co-payment (if any).
Waiver of Premium
It is like an insurance for your insurance plan. If you are diagnosed with CI and/or TPD, the insurance company will waive off your premium so that you can benefit from the insurance even if you are unable to work due to serious illnesses and/or TPD. This may relieve the concerns of the Insured Person who worries about not being able to pay the premium to sustain the policy.
Getting a better idea of what you have in your insurance policy now? Do review your benefits periodically to make sure they fit your needs.
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