Critical illness cover – global

POSTED BY Madhu Moolya ON February 9, 2013 1:59 pm COMMENTS (14)

Dear Manish,
I am highly grateful for your timely mails and guidance.  I am quite new to the investments and insurances and your mails are like awakening sessions for me.
However, I would like to know where can I get critical illness cover for global for both my girls aged 26 and 24 respectively.  Your advice and guidance would be highly regarded. 
Kindly note that I just took Term Insurance for both my girls thru Kotak Life Insurance and could  not get much help on critical illness cover.
Thanks and regards,
Madhu (Mrs)

14 replies on this article “Critical illness cover – global”

  1. Dear Madhu, it seems you are a regular visitor for JI main site as well as forum. As a positive step, why are you not recommending these sites to your d’ters to visit & read regularly. They ‘ll be able to decide for their own good very soon. Regarding Critical illness, please ask your d’ters to create a corpus from their own saving. If your family history is prone to some health issues, CI policies can be taken at this stage also.



  2. Madhu Moolya says:

    Perfect, many thanks for your elaborated response Ramesh. I feel satisfied by taking the right decision at a right time by investing in Term Insurance for my children. Now, only I need to look for either a good Health Insurance / Critical illness cover for my girls before they get married and proceed further in life..

  3. Kotak Support Team says:

    Dear Sir,

    We request you to write us on ID along with policy no. for better assistance.

    Kotak Support Team

  4. Madhu Moolya says:

    Dear Ramesh,

    I totally understand what you have stated regarding the Term Insurance for my girls. I am not so very clear about this critical illness cover at this stage so far. Apart from the Term Insurance, I am encouraging my daughter’s to save money in SIPs, etc. as well. If critical illness is not required at this stage, may be I should wait till we are clear on the subject. However, I just need a small query, how one can compare the endowment policies from LIC to term insurance?? Is it necessary that one must ONLY opt for term cover or is it beneficial to have endowment policies as well? Your advice and guidance is appreciated.

    1. Ramesh says:

      Endowment policies, money-back policies do not serve any purpose for people who want to keep things simple and clear. They are a mess, in short.

      I will give you some numbers.

      1. For a pure term insurance plan, the payout is about 500-100 times. So you pay Rs. 1 for a cover of 1000, for 25 years. In case of demise, the nominee gets Rs. 1000. If you dont die, you get nothing. Your Rs. 25 dont come back.

      2. In endowment policy, the payout varies from 5-40 times (I will take 25x for illustration). So you now pay Rs. 40 for the same cover of 1000, for 25 years. In case of demise, the nominee gets 1000. Done. You see, you are paying an extra 39 for all that amount throughout the term period of the policy. Amazing amount of waste, if you ask me.
      The difference between 1 and 2 is that if you do not die in the time period of the policy, you will get some amount (this amount is not guaranteed). You also should realize that you have paid an amount of 50 x 25 = 1000 over this period.

      In traditional policies, the extra amount of 39 is invested in debt instruments (mostly), after taking care of different expenses by the company (which are opaque) and you get whatever is the result of that amount depending upon the faith of the company.
      In Ulips, you have some power over the management of this 39, and you can manage better (though, you need to realise that there are quite a large number of different headings of expenses in these types of plans).

      So, the better thing is to manage that 39 on your own, provided you have the knowledge and discipline to do that.
      I hope this is clear.

    2. I disagree with Ramesh’s view on term insurance. Irrespective of who is paying premium now I think you have done a very intelligent thing in getting TI for them at an young age. It is a very prudent thing to continue this (at least until their kids in future are well settled) irrespective of whether they are going to be working after marriage or not.

      By taking a TI cover now you have lessened their burden since the cover will increase each time they have kids.

  5. Madhu Moolya says:

    Dear Ramesh / Ashal,

    Yes!! Both my daughters work and study and keeping in mind the future, I went ahead with the Term Insurance. Also, was keen on critical illness cover so as to avoid any confusions in future and to be prepared for any untoward incidents in life.

    1. Ramesh says:

      A person working and getting money is one thing.

      A person working and getting money, and another person depending upon that income is a different thing. Term insurance makes sense, in this case and not in the earlier one. It can happen that this may not be true at this very moment but can occur in near future. Check and think about this. But suppose, no one is dependent on her income now or in future, after her marriage, since her spouse will also be earning, then a pure term insurance does not make sense. It is just an expense and nothing else. In case of her unfortunate demise, will the “death benefit” be of any help to you or anybody else – my answer is no.

      Same thing regarding Critical Illness. These plans are not simple plans like a term insurance. In term insurance, the person dies, the insurance company pays the sum assured. Done. While in Critical Illness, if you have 1 + 2 + 3 (and not 1.2 or 2.1 or 3.5), and you manage to live beyond, then you will have a sum assured. If you will really look at it, you will find the risk covered is not “worth” the premium.

      My opinion is ‘you cannot cover all the risks at a reasonable premium’. So keeping things simple in the manner of a term and a health insurance are more than enough.

  6. MADHUKARA A.R says:

    Mr Madhu

    Go for Barati AXA critical illness policy, which is best of product now
    I have taken that. There are two options Indemnity and Benifit. Go for Indemnity plan and one person can take benifit up to ten lakhs.

    Before purchase please read the policy wordings which is avilable online

    My name is Madhu Maiya
    Advocate and Agriculturist

    1. Dear Madhu Maiya,

      May I know on what basis you think Barati AXA critical cover is the best?

      Ramesh is a doctor and I would take his views on CI cover very seriously!

  7. Dear Madhu, let me put dear Ramesh’s question differently. Are your D’ters earning? If yes are you & other family members dependent on this income? if no, who is paying the prem. for these 2 term covers?

    Actually, dear Ramesh wants to know, do your D’ters really need term cover or not?

    Regarding Critical Illness cover, what’s your exact need? Please elaborate.



  8. Ramesh says:

    Can you enumerate reasons for taking Term Insurance for your girls?

    We can talk about critical illness later on.

    1. Madhu Moolya says:

      Term Insurance we have opted following guidance from experts and also keeping in mind the low premium value, security for dependents and depreciation, etc. Hope it explains.

      1. Ramesh says:

        Yes, what Ashal mentioned.

        Is anyone really dependent upon your daughters’ incomes? All insurances (life, critical cover, etc) are basically a transfer of risk from the actual earning member to the insurance company.

        If there is no income by your daughter, then there is no point in getting a life cover.

        In my view, a critical illness cover is so carefully worded by the companies, that they are rather meaningless.
        Sample this: Heart Attack needs 3 things – 1. Pain 2. ECG changes 3. increased cardiac enzymes. If any 2 are there, they will reject it. So, you need to have all 3 plus you need to survive 30 days after the disease. Very strange. Also, angina and heart-failure are excluded. Same is with all others conditions.

        In short, I would advise against buying any of these policies.

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