Friday, 23 September 2011

Not wrong but inappropriately done

In life insurance policy normally you can add additional benefit to the policy, we call it rider. In Malaysia common practice is to add medical insurance to a life policy, ie. hospitalization and surgical coverage. The reason is obvious because life insurance cover you whole life therefore it's coverage terms will always out run the medical coverage term, so we don't choose endowment policy over life policy to attach such a rider, because endowment policy could have shorter coverage term than the rider ie medical coverage term.

Life Policy without rider is like nasi lemak biasa.

Life policy can attach riders just like nasi lemak can add many other delicacies.

Today I came across a customer's policy whose medical insurance rider been attached to a critical illness policy. Some critical illness policy covers you whole life, and this one covered up to age 85, seems ok to attached medical policy to this kind of policy, but the problem is, what happen if the client fall critically ill? Sure enough the policy will pay the sum insured, after paid the coverage amount the policy ceased, right? than what will happen to the medical rider? also cannot continue right?

Client told me that the agent who put up such a plan for her is doing very well. I wonder how long will he last? Hopefully he didn't sold too many such a policy, because if a person fall critically ill, most probably he can not buy anymore insurance, and in this scenario he will loose his medical coverage as well, and worse still, when he needed it the most and can not have it anymore.

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