Critical illness rider

Dear Mr Tan,

I bought a basic life policy with a few riders (ie accident, critical illness, etc).

I was assured by the insurance agent that all premiums for the riders would be loaded up to a maximum of 1.5 times the original premium.

When the policy document arrived, only critical illness had a written clause that indicates that premium would be capped at 1.5 times the original premium. There is no cap on the other riders.

Is this all right?

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REPLY:

I believe that the premium for the basic policy and all the other riders (except for critical illness) are already fixed at the current rate for the duration of the contract. You can check with the agent to confirm that this is the case. If so, you do not have to worry about future increase in the premium rate for these riders.

The premium rate for critical illness is the only rider that is subject to revision. This is the practice of the insurance industry, and reflects the possibility that the claim on critical illness may increase significantly in the future. In your case, your insurance company has set a capped at 1.5 times of the premium.