Insurance Plans 1901 views March 18, 2020

SBI Life Critical Illness Plan

Rohan who stays at my next-door got married 5 years ago. Today is their anniversary. While I was going out for an evening walk, I knocked at their door as I thought of wishing them on their anniversary. Priya opened the door with a cheerful smile and greeted me. She jumped to show me her anniversary gift, a lovely mobile phone. Also, she gave me some information about how important it is to get your cell phone insured. I enjoyed the conversation with her over a cup of tea. Suddenly Priya’s phone was ringing, it was a call from Rohan’s office. On receiving the call I saw Priya’s face going pale. She spoke after a long time and told me with tears in her eyes that Rohan had complained of chest pain before fainting in office and thus was immediately admitted to a speciality hospital. After rushing to the hospital we found Rohan in ICU. While Priya was signing the admission papers and completing other formalities, an important issue kept bothering her, is Rohan covered under a critical illness plan? He has quite efficiently insured the new mobile phone, but has he ever thought of getting a critical illness coverage?

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There are many term life insurance plans in the market which add critical illness as a rider to the main plan for which one needs to pay an additional premium to avail of critical illness coverage.

Whereas, SBI life critical illness plan gives your life-coverage as well as critical illness coverage without paying any additional premium cost.

What is the SBI life critical illness plan?

SBI critical insurance plan is a support system for individuals who want to plan ahead and avoid heavy financial stress in case of any sudden illness. It gives a comprehensive coverage for your life as well as any critical illnesses without incurring any additional cost. On every policy anniversary, the life and critical illness cover are rebalanced, keeping the total sum assured constant. A lump sum amount is paid in case any of the 36 critical illnesses, like cancer, kidney failure, stroke, coma, total blindness, paralysis, if diagnosed. Also, all the future premiums are waived off.

Calculations in SBI life critical illness plan:

SBI life critical illness plan does not make you incur such additional cost. It is in fact very cost-effective. This term insurance plan gives you the benefit of increasing critical illness coverage and decreasing life coverage.

Thus, Total Sum Assured = Sum Assured under Life cover + Sum Assured under Critical Illness cover

While the Total sum assured and the premium remains constant during the policy period, the ratio between sum assured under life cover and the sum assured under critical illness keeps changing. Initially, this ratio starts with an 80:20 breakup. But as earlier mentioned, with each passing year of the policy, there is an increase in critical illness coverage and a decrease in life coverage.

The following example explains the working mechanism of SBI life critical illness plan: Say, Rohan in the story had purchased an SBI life plan of Rs.1lakh for a period of 20 years at the age of 30, so in accordance with 80:20 ratio, 1st year Life cover sum assured is Rs.80 thousand and critical illness sum assured is Rs.20 thousand. In 2nd year, If Critical Illness sum assured increases by 10% (10% of Rs.20000 = Rs.2000) then Life cover sum assured will decrease by Rs.2000. Thus, in the 2nd year, the critical illness sum assured increases to Rs. 22000 and Life cover sum assured decreases to Rs. 78000. Similarly, in the 3rd year, critical illness sum assured increases to Rs. 24000 and Life cover sum assured decreases to Rs. 76000. This process will go on till the end of the policy period i.e. 20 years.

Important Features of SBI life critical illness plan:

  1. Eligibility criteria – The age at the time of entry is minimum 18 years and maximum of 65 years.
  2. Sum Assured – The sum assured under this policy is 1 lakh to 50 lakhs.
  3. Policy Term – This plan has a policy term of one year/ three years.
  4. Premium payment – Policy-holder can choose to pay the premium yearly/monthly
  5. Eligible members- This plan includes self, spouse, one child
  6. Coverage benefit-
    • Critical Insurance benefit paid only after the survival period of 14 days from the first diagnosis of critical illness.
    • Some major critical illnesses included – cancer, kidney failure, multiple sclerosis, major organ transplant, stroke, coma, total blindness, heart valve surgery, paralysis, first heart attack.
    • Lumpsum pay-out is given in addition to any health insurance or Mediclaim policy already owned.
    • All future premiums starting from the date of diagnosis of critical illness are waived off.
    • Critical illness benefit will be paid only once on diagnosis of covered critical illness.
    • No more rebalancing of critical illness sum assured and life cover sum assured will take place. Critical illness benefit will cease once claimed and Life cover sum assured will remain constant thereon.
    • The Critical illness benefit is not paid if any other critical illness is diagnosed during the waiting period of 90 days from the date of commencement of risk or revival whichever is later.

Why will you choose SBI life critical illness plan?

After knowing the features of SBI critical illness plan you must also know the advantages that make this policy the best one in the market :

  1. Comprehensive policy – This term insurance plan covers your life as well as critical illness situations and thus gives comprehensive financial support.
  2. No additional premium payment – There is absolutely no requirement to pay an additional premium for covering critical illnesses along with life coverage because at every policy anniversary the critical illness cover increases and life cover decreases by the same amount.
  3. Automatic rebalancing – On every policy anniversary the critical illness cover and life cover get automatically re-balanced without disturbing the total sum assured.
  4. No future financial stress – Once any critical illness among the 36 critical illnesses is diagnosed all future premiums are waived off.
  5. Big financial Support – A lump sum amount is paid on the detection of any of the 36 critical illnesses that reduce a lot of financial stress on the treatment of such sudden illnesses.
  6. Tax benefit – Deduction under section 80D can be enjoyed on the premiums paid.
  7. Wide coverage – SBI critical insurance plan covers the maximum number of critical illnesses (36 critical illnesses) in comparison to other policies.

Conclusion:

Our hectic lifestyle in our fast and developing world is making us increasingly falling into the hands of different critical illnesses like cancer, hypertension, diabetes and heart stroke. The high cost associated with these critical illness treatments has increased the need for an insurance plan which can give more coverage than a basic health insurance plan. This financial burden can only be reduced if a critical illness plan i.e. SBI life critical illness plan comes into the function which gives additional coverage without any additional cost. So, it is better to get your armour (SBI life critical illness plan) ready now, to protect yourself from any unforeseen enemy (critical illnesses and their treatment which can actually drain out your savings).

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