So you’ve done your research and you have determined that critical illness insurance is something you need. When purchasing coverage, it can help to know the terminology behind it. Sometimes the slightest change in phrasing can make a great difference when it comes to coverage.
No medical critical illness insurance is like any other type of critical illness coverage, there are certain types of no medical insurance (and insurance riders) out there, each with their own meaning and limitations of coverage. Below are listed some of the more common terms you might see on your policy:
1. Return of premium or ROP- this is a rider that might be found on no medical critical illness insurance policies. A rider is an added feature on an insurance policy, kind of like an incentive or bonus offer. With ROP, if a policy is cancelled the policyholder can request all the premiums that he or she has paid over the years to be returned to him or her as long as the policy has been held for a required period of time and there have been no claims. There is also another form of this called Return of Premium on Death or ROPD, which is exactly what it sounds. If no claims have been filed and the policyholder has passed away, the premiums will be refunded to their estate.
2. Two other riders that may be included in a no medical critical illness policy are: Waiver of Disability, where if the policyholder becomes disabled premiums do not have to be paid while he or she is disabled, and Second Event, where if the policy holder has a second critical illness, he or she will receive 50% of the insured amount over and above the base payable amount.
Permanent: There are a few different types of no medical critical illness insurance policies here. Unlike term, permanent coverage will last until death or the cancellation of the policy. Two types of permanent coverage are: Permanent level premium-paid up to age 100- this type of policy has level premiums up until death or age 100 and permanent level premium-paid in 15 years, this type has all the policy’s premiums paid up within 15 years, with coverage continuing until death or cancellation. These policy types will vary depending on the insurance company and may not be available to everyone who applies. It is important to discuss your insurance policy in-depth with your insurance broker.
No medical critical illness insurance policies are becoming very popular, and with reason! They allow people who may not have qualified otherwise to get coverage and offer protection in situations of life threatening illness. But like with any insurance product, it is important to know what goes into each policy, to know what will be covered and what will not, and what options are available to you. When purchasing coverage, make sure to discuss all your options with a broker and educate yourself on what policies and riders might be best for your situation.
For more information, visit www.NoMedicalLifeInsurance.ca or call 1-866-899-4849
