Insurance Review – IFFCO Tokio Critical Illness Benefit Policy: Keeping it simple

In earlier articles, we’ve talked about the need for working folk to have a critical illness health cover along with their hospitalization plan. We’ve been evaluating available critical illness policies against the checklist of criteria we detailed in our article, ‘What to look for in a critical illness health plan’. This article reviews the IFFCO Tokio Critical Illness Benefit Policy which we think ticks the boxes on simplicity and generous sum insured. Here is a detailed look :

Key Features

• This is a simple benefit policy that will make a one-time payout on the first diagnosis of one of the listed critical illnesses.
• It covers 25 critical illnesses / surgeries / medical events. Full details of the same can be found on the website. 
• The initial waiting period is 30 days.
• The survival period for a claim to be made is 28 days.
• The policy comes with a standard set of exclusions. It covers pre-existing conditions after a waiting period of 48 months as long as they were declared and accepted.
• The policy is available on an individual basis. Alternatively, the entire family can be covered under one policy but with each member having a separate sum insured. ‘Family’ includes self, spouse, children, parents, parents-in-law and siblings. 
• The age at entry for an adult is between 18 years and 65 years and for a child between 3 years and 23 years.
• The policy comes with lifelong renewability. 
• The sum insured can go up to Rs. 1 crore (Rs 1 lakh/ 2lakh/ 3 lakh/ 4 lakh/ 5 lakh/ 7.5 lakh/ 10 lakh/ 15 lakh/ 20 lakh/ 25 lakh/ 30 lakh/ 50 lakh/ 75 lakh/ 1 crore).
• The policy is available for terms of 1, 2 and 3 years.
• Pre-policy medicals may be required for people over 50 or those having any adverse medical history.

What we like

We think that this policy scores on the following counts.

#1 Simplicity

In terms of design, this plan stands out for its simplicity. It covers 25 listed critical illnesses / surgeries / medical events. It makes a lumpsum payout on the first diagnosis of any of these, as long as the insured survives for the minimum survival period of 28 days. After a claim, the policy terminates and is no longer renewable for the insured for whom the claim was paid.

Each of the critical illnesses / surgeries / medical events has a set of specific criteria that have to be met in order for a claim to be honoured. A list of documents specific to each illness have to be submitted to make a claim. The policy comes with exclusions that are standard for critical illness covers.

#2 Generous Sum Insured

Critical illness covers need to be large enough so that they cover both potential treatment costs and the loss of income for the insured, especially if the policy makes a single payout.  With sum insured in this policy at Rs. 1 crore (although online purchases seem to only allow sum insured up to Rs. 20 lakhs and therefore, one would need to visit a branch for this or contact the call center), this policy addresses the requirement of having a large enough cover.

#3 Shorter initial waiting period

Most critical illness covers come with an initial waiting period of 90 days after which the cover kicks in. IFFCO Tokio’s critical illness plan kicks in after just 30 days.

#4 Reasonably priced

Based on the rate charts available in the prospectus, here is how much a Rs. 10 lakh cover would cost.

To put this in perspective:

• Bajaj Allianz’ Critical Illness Policy that covers only 10 critical illnesses charges ~ Rs. 3,000 for a 26 – 35 year-old and Rs. 5,500 for a 36 – 40 year-old.
• Kotak Secure Shield that covers 18 critical illnesses charges Rs. 2,975 for a 26 – 30 year-old and Rs. 3,651 for a 31 – 35 year-old and Rs. 4,230 for a 36 – 40 year-old.
• HDFC ERGO’s Platinum option that covers 15 critical illnesses, charges a premium of ~ Rs. 3,500 for a 26-30 year-old and Rs. 4,000 for a 31-35-year-old.
• Oriental Insurance Critical Illness Policy’s Plan B that covers 22 critical illnesses comes at a premium of Rs. 3,341 for a 26-30 year-old and Rs. 3,544 for a 31-35 year-old and Rs. 5,533 for a 36- 40 year-old.
• Aditya Birla Activ Secure’s Plan 1 covering 20 Critical illnesses Rs. 4,383 for a 40 year-old 

All of this indicates that IFFCO Tokio’s plan is quite reasonably priced for the cover it offers.

What we don’t like

While the Critical Illness Benefit policy by IFFCO Tokio stands out for being a reasonably priced, simple policy with sufficient sum insured, we think the following are its minuses. 

• While the list of illnesses covered is not small, this plan cannot boast of covering a wide range of illnesses especially compared to the earlier two policies that we reviewed - Aditya Birla’s Activ Secure Critical Illness Plan and Bajaj Allianz’ Criti Care Policy.
• The plan covers Parkinson’s disease and Alzheimer’s disease of a particular severity (as determined by criteria that have been laid down). However, the pain point is that this plan covers these two conditions only if they occur before the age of 50. Most people face the onset of these conditions much later in life, when they may need this cover more badly. Both of these are life altering and require expensive care.

About the insurer

Incorporated in 2000, IFFCO-Tokio General Insurance Company Limited is a joint venture between the Indian Farmers Fertiliser Co-operative Limited (IFFCO) and Tokio Marine Group. While IFFCO Tokio may not be the first name that comes to mind when you are looking at health insurance policies, the company has a good claims record. Its claim settlement ratio by value of 94.75% and a claim settlement ratio by number of 97.73% for the nine months ended December 2021 compare favourably to rivals. Our article ‘Which insurers settle your claims the best’ will tell you more about what these numbers mean and how to interpret them.

Suitability

Given this policy’s structure and coverage, we think it would be worth considering if:

• You prioritise simplicity in structure in your insurance cover.
• You are in reasonably good health and the list of 25 critical illnesses covered is sufficient for you (you could involve your doctor in this decision to evaluate if the 25 illnesses covered and the conditions for each of them works for you and your medical history).
• Your risk level for Alzheimer’s disease and Parkinson’s disease is low.
• You are able to get the sum insured that you require under what is available in this policy or are able to supplement the sum insured with your own corpus.
• You have put off buying a critical illness cover and are therefore not ‘young’ anymore which makes the shorter waiting period attractive.

The biggest advantage of this policy over the earlier two policies we reviewed – Aditya Birla’s Activ Secure Critical Illness Plan and Bajaj Allianz’ Criti Care Policy is that, this policy is a straight forward critical illness cover that does not have complicated sections / variants with varying rates of coverage that require several readings to fully understand it. While it does not cover ‘minor’ critical illnesses or make multiple payouts like the earlier two policies, we like it because it allows you to receive a larger sum insured with a shorter initial waiting period. 

As always and like with any insurance product, do go through the fine print if possible with your doctor, to see if there is anything that could work against you, in view of your personal medical history. Do also carefully consider the exclusions and various criteria to be met under each critical illness in order for a claim payout to be made. 

Important documents relating to this policy: Prospectus, Policy Wording

Disclaimer: Please note that the above is only a review of the plan and not a recommendation. Please make a decision based on your requirements.