Return of Premium Benefits: Strengthening Your Critical Illness Insurance Policy

One key objection others have about getting a critical illness insurance policy is the belief that the possibility of getting critically ill is so small. “What happens to the premiums I paid, when the policy terminates or when I die without qualifying for a claim under the terms and conditions of the policy?”, they ask. Or, “what happens if I can no longer afford to pay for the policy and will need to cancel it, do I lose all the previous payments I made?”, comes another objection.

Both are valid concerns. Of course, you are making an investment and you don’t want that investment to go to waste. You would want to see something of what you have paid out.

To strengthen your policy and to ensure that you get something, whether you are diagnosed with a critical illness or whether you continue to live a healthy life, you can opt to get the return of premium rider.

Return of Premium Rider

This rider will ensure that you get back the premiums you have paid.

The instances when the return of premium benefit will kick in will vary from policy to policy, but usually these are the conditions where your premiums can be refunded to you:

You die while the policy is effective but the cause is not a covered critical illness. For instance, you die due to an accident.
Anniversary or age option.
You can get a rider that guarantees a return of premium at a specified period in your policy. For instance, you can get a 15 or 20 year option where you stand to receive the premium refunds when the policy reaches the set anniversary. This is as long as the policy continues to be in force at the time of the anniversary.
Premium upon expiry of the policy.
If the policy has expired at age 65 or 75 and no claim has been made, the premiums will be refunded to you.

As for cancellation, usually you won’t get a refund if you cancel before the set anniversary when the refund is to be paid. The policy must also be in force for a set number of years.

The premium refund is usually the total premiums you have paid over time less any refunds previously paid. Other deductions will include any unpaid premiums.

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