And life-or-death conditions are just the tip of the iceberg. Even if one exceeds the originally anticipated life span, the insurer may delay the payout to assess the claim’s credibility. One of the procedures, for example, is to confirm whether the insured knew of the critical illness when coverage application.
Automatic increase benefit rider is a raider introduced by a couple of Canadian Critical Illness insurers not long ago. It works to augment the policy’s critical illness benefit at recurring intervals. These automatic increases also mean that the monthly outlays by the appropriate ratio.
RBC Insurance, for example, gives its customers an Automatic Increase Benefit Rider, allowing the client to raise her or his policy benefit each other year.
What is more, during the initial decade of the Critical Illness plan, the insured person can increase her or his plan amount without verification of insurability. The amount will be 20% of the originally agreed-upon benefit. Effectively, this means the coverage amount can boost by 100% this way.
One caveat: RBC automatic increases can not be avoided or delayed. In case the customer opposes an increase, the add-on automatically terminates, while past increases will still be effective.
On another note, Canada Life has a unique approach to handling critical illness policies for cigar and pipe smokers in that they consider cigar and pipe smokers as if they were non-smokers for the purposes of critical illness and disability insurance policies. This fact will greatly impact the resulting plan price.
Check out for recommended reading: How Equitable Life Insurance reworked its Equiliving Plan for kids.
Written by Lorne S. Marr, an insurance specialist and an expert on no medical life insurance. Lorne works with more than 13 Canadian insurers.