Is my Critical illness insurance flexible?
Initially yes your critical illness insurance plan is flexible; you can choose if you want to keep the policy level or decreasing. You can even say what you want the interest rate at which your sum assured decreases by with a mortgage critical illness policy with companies. You can specify the term of the insurance and you can also decide if you want to add any additional extras onto the policy such as TPD of Waiver.
But it is only as inception or at the start that the plan is flexible. Once the policy has started the situation becomes very different, there is no flexibility in the system normally. If you want to change anything you can’t and it would mean taking a fresh policy normally or doing a “top-up”. It is an important decision to make sure that the policy that you take is the right one for you in the first instance. As the older you get and if you decide to change your mind the plan will be a lot more expensive as these things are very age related.
It is also very important to ensure that you choose the correct term from the outset. If you decide to only take a 5 year plan and you then want to take a further 10 years after this initial one has concluded then the price will be far more expensive than when it was initially taken out. If the plan has started it will be hard to modify unless you have paid a larger premium in the first place to allow you to modify it. It is hard for the insurance providers to build flexibility into plans so they are often not, just remember to try and consider everything from the outset.
When you first begin your critical illness insurance policy, it does give you a bit of flexibility. You can choose to have the policy as one that is level or one that is given to you in a decreasing manner. This means that at the amount due to you remains steady through the year. Else if you take out a mortgage critical illness scheme, it can reduce in proportion to your mortgage payable through the year. Besides this you can also determine the rate of interest through which your mortgage policy reduces each year. These policies also give you the freedom to specify a rate of interest at which you would like your sum assured to reduce periodically. There are also several additional riders that you can opt for on your policy in order to make it more effective.
One thing has to be kept in mind however, that all of this flexibility is only at the time of availing of the policy. Once the policy comes into effective, you don’t really have much of a say in its flexibility. You can’t really change any aspect of the policy. If you want to avail of some new offers, you will have to take out a new policy or opt for a top up. During a top up of an existing policy you can choose some additional riders. That is why it is extremely important that you know all aspects of the policy before signing it on. Remember also that the older you get the more expensive critical care policies and its associated riders become.
Make sure at the time of selection that you have chosen the right term. If you choose a five-year plan to begin with, wanting to extend it after the 5-year period to a 10-year can be an expensive affair. Once you chose a particular scheme, you will not be able to alter any aspect of it. The only way you can do this is if you have paid a very hefty premium that gives you the ability to make changes. The basis of any insurance plan is the fact that it is not meant for flexibility to be built into it. Therefore it is necessary that you look into every aspect of it before you settle on a policy.