Policy holders of Life Insurance Corporation can now add a critical illness clause to their existing covers.
This follows the corporation withdrawing the last of the high assured return plans- Jeevan Asha II and Jeevan Akshay I from October 16.
The critical illness rider introduced by the corporation for the first time will replace Jeevan Asha II.
The latter is essentially a health plan covering 18 to 20 major illness and offers a high assured return of 7 per cent (Rs 70 per Rs 1,000 sum assured).
Jeevan Akshay I, a single premium immediate annuity plan, will be replaced by Jeevan Akshay II. The latter will offer lower returns ranging between 4.75 to 4.9 per cent from the prevailing 6.25 per cent.
LIC sources said, "With falling yields on investments we are unable to guarantee higher returns."
The critical illness rider can be bought at an additional premium on existing plans like endowment policies (plan 14 and plan 48), Jeevan Mitra Double and Triple cover (plans 88 and 133) money back cover (plan 75 and plan 93) and Jeevan Anand (Plan 149).
Policy holders can take the critical illness cover equal to the sum assured for a minimum of Rs 50,000 or a maximum of Rs 500,000.
On detection of any of the critical illness covered LIC will pay the sum assured to the policy holder immaterial of the actual expense undergone. This benefit will be offered only once during the term of the plan.
Under Jeevan Asha II policy holders can avail of critical illness benefit twice during the term of the policy, subject to actual hospital expense and capped at 50 per cent of sum assured.
From October 16, at an additional premium, policy holders can also avail of waiver of premium rider.
This rider waives future premium payments on detection of illness covered or surgery. The individual's basic policy however continues till maturity or death.
The critical illness rider covers heart attacks, stroke, cancer, kidney failure, major organ transplant, paralysis, third degree burns, blindness, coronary, artery bypass surgery, heart valve replacement or repair and iota graph surgery.
Policy holders aged 18 to 50 years can avail of this rider with the benefit extending to the individual until the age of 60 or till maturity of the policy.
For instance a 30 year old individual having taken an endowment policy for 20 year term would need to pay additional Rs 475 per thousand sum assured for the critical illness rider.
He can also pay additional Rs 210 for the waiver of premium rider. This is over and above the basic annual premium of Rs 4800 for the endowment cover.
