Critical illnesses are on the rise, with increasing lifespans. When you’re struck with a critical illness, such as cancer, you become unable to work. Critical illness plans step in to provide that lump sum of money for you to tide the tough times. However, critical illnesses often strike several times, necessitating longer period of protection. However, traditional critical illness plans terminate after the first payout. This leaves you in a vulnerable position since you’d have preexisting conditions that disqualifies you from subsequent critical illness plans. In response to this demand for protection for critical illness relapse and/or recurrence, Tokio Marine introduced the TM Multicare. In this article, fundMyLife reviews the TM Multicare and identifies its notable features. Disclaimer: this review is accurate as of October 2018.
What is it?
The TM Multicare is a multi-pay critical illness plan that covers critical illnesses in early, intermediate, and late stages. The policy term is until either age 70, 75, or 85.
Multiple payouts across critical illness stages
In the brochures, you might see that it says “Total Payout of up to 900% of sum assured“. Woah what – that’s quite a bit. Let’s break it down a little.
The layers of benefits are divided across three layers: Layer 1 (Early/Intermediate Stage Critical Illness), Layer 2 (Advanced Stage Critical Illnesses), and Layer 3 (Additional Cancer Benefit).
The critical illnesses are divided into three groups as well: Group 1 (Cancer and Illnesses Related to Major Organs), Group 2 (Heart-Related Illnesses), and Group 3 (Illnesses Related To Nervous System and Other Systemic Conditions). The table below is one of the things that you’d see in the brochure. Let’s focus on the first part of the table, and see why the payout for Layers 1 and 2 across the three Groups is “up to 700%”
Therein lies several conditions for your payout. In the first layer, Layer 1, you can claim up to two times and 100% sum assured per claim and at a maximum of $350,000 per claim and each claim must be from a different group. It means you cannot claim for early cancer in two different places twice using Layer 1 benefits.
Similarly, you can only claim twice from Layer 2, and 300% of your sum assured minus whatever you’ve claimed in Layer 1. On top of that, you have a 1-year waiting period between claims for different groups of advanced stage critical illnesses. How do you get 700% of your sum assured?
In this example table, you can claim twice from both layers. We did a quick summary of the potential payouts that you can get if you were to contract diseases under the three groups.
In the second table in the brochure, you will also read about the Additional Cancer Benefit:
The third layer is relatively straightforward, with you being able to claim up to two times again at 100% each. This layer is for new diagnosis of cancer and advance stage cancer. However, this has extra conditions in that you have to wait at least two years before you can dip into Layer 3. You also need to wait two years between the first and second claim under this Layer.
With the 700% from the first table, and 200% from the second table, you’d get the 900% of sum assured promoted by the marketing materials of TM Multicare.
It covers 20 additional conditions, 10 special conditions and 10 juvenile conditions. As a result, this plan forms the largest number of illnesses among the new generation of multi-pay critical illness plans.
Under the special benefits, you can claim a maximum of five special benefits. Each special condition is payable once per policy, and at a maximum of $25,000. Making special claims does not reduce the sum assured.
Instead of the usual fixed lump sum that most critical illness plans provide, the death benefit that TM Multicare provides is 10% of the sum assured. As such, this feature allows your death benefits to scale with whatever sum assured that you have.
On top of the main plan, you can also add riders that enhance your plan. These are the list of riders available for the plan:
- Waiver of Premium Rider
- Payer Benefit Rider
- Enhanced Payer Benefit Rider
- Spouse Rider
- Enhanced Spouse Rider
The riders are useful because, especially plans that waive your premium in the case of critical illness claims or death or total permanent disabilities.
At 900% of sum assured, the TM Multicare has the highest potential multiple of sum assured. What’s the catch? Firstly, if you have noticed there is a lot of terms and conditions for claims to succeed. On top of that, benefits for Layer 3, for example, require a long waiting period. Furthermore, you won’t be likely to claim 900% of your sum assured, given how hard it is to withstand multiple critical illnesses at any time.
On top of that, the second catch is that amongst the current generation of multi-pay critical illnesses, TM Multicare ranks amongst the most expensive in terms of premiums. In fact, it gets even more expensive as you age.
The additional special conditions that the TM Multicare covers is a nice touch, and at 20 it is the largest number amongst comparable plans in its category. However, these diseases are exceedingly rare, with several exceptions such as diabetes and angioplasty.
The death benefit payout that depends on the sum assured is different from the existing critical illness plans that pay a fixed lump sum. This feature is more proportional compared to the lump sums. That said, don’t pick this plan just because of the death benefit. You should get a dedicated life insurance plan, term or otherwise instead.
Lastly, we cannot emphasize enough that there are a lot of terms and conditions for and in between claims, which means you have to be very careful and make sure you know what you’re in for.
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This is by far the most complicated plan we’ve reviewed so far. As such, we hope you found our dissection useful. If you’re interested in it, you should ask your financial adviser. The TM Multicare has many terms and conditions that benefits from expert help and advice.
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