Nowadays many Banks offer health insurance. The premium with some features looks beautiful. However, whether one should buy such Health Insurance by Banks or not? Let us diss the pros and cons of such products.
Usually, banks offer such products or additional benefits to garner the customers or to retain them. I found few individuals who opened the account only because they need Health Insurance by Banks. But blind jumping just because of few eye-catching features may end up in trouble for you.
Advantages of Health Insurance by Banks
Let us first discuss some advantages of such products.
# Low Premium-
These are group health insurance products exactly like employer buy for their employees. Hence, the premium is lower compared to individual or family floater plans you buy separately.
This is why many buy such products. Especially if you compare the premium, the difference widens as you grow older.
# No medical Tests-
In case of individual or family floater plans, if you cross certain age limit, then insurance companies may ask for medical examination to enter. However, in case of such health insurance by banks, you can enter without any medical examination requirement. Because such products are group health insurance products.
# Life Time renewal
Earlier such plans used to restrict individuals to continue their health insurance after a certain age. However, with the advent of lifetime renewal option by individual and family floater plans, now these plans also offer you lifetime renewable option (For example Canara Bank’s Easy Health Insurance Plan).
# No Age-based premium
In case of individual and family floater health plans, your premium is fixed by your age (oldest family member’s age in case of family floater). However, in case of Health Insurance by Banks, many products offer single premium rate across age group. But few Health Insurance by banks loads the premium based on the age group. Hence, better to check the rates. For example, Canara Bank’s Easy Health Insurance Plan offers a single premium for all age groups. But the Union Bank’s Union Health Care loads the premium based on age group of the insured.
# Tax Benefits under Sec.80D
Many have some misconception that the premium paid towards such health insurance will not be eligible for deduction under Sec.80D. However, Health Insurance companies mentioned clearly in the prospectus of these products that the premium paid towards such health insurance products is also eligible for deduction under Sec.80D. Hence, you no need to worry about tax benefits.
# TPA or Cashless also available
One more myth spread by middlemen that claim may be a delay as banks may not give you service in a timely manner. However, if you go with the prospectus of such products, you noticed that they offering claim service exactly like individual or family floater schemes through their TPA service or in-house claim settlement team.
Hence, I don’t think service will be an issue. But open to listen from readers about some bad experiences.
# Boon for Senior Citizens or Unhealthy
This may be the biggest boon for senior citizens or unhealthy individuals who are desperately looking for health insurance. However, make sure to check the exclusions properly. If you get health insurance without any medical examination, then it does not mean that all illness is covered and your all claims are accepted.
This is one of the best plans if your all doors are closed to buy individual health insurance plans due to health issues or high premium.
# Offers additional features like Accidental and Critical Illness
Along with group health insurance, few of such plans offer you accidental and critical illness covers. Hence, all at once place (even though with some restrictions in features) may be good for an older generation.
Disadvantages of Health Insurance by Banks
Above we discussed advantages of health insurance by banks. Now let us explore the negative side of such products.
# You must be account holder of the bank
Such health insurance by banks is available only for bank customers who have savings account with the bank. You may all know that the current charges applicable to normal savings accounts. If the savings accounts is actually a NEED, then it is wise to tie up with such health insurance products.
However, if you are opening the account for the sake of buying this health insurance product, then keep in mind that you have to bear the cost of managing such savings accounts like MAB and other charges.
# Sum Insured Limit
Such Health Insurance products offer you limited sum insured amount. Especially few products restrict the sum insured after a certain age like after 65 years of age the sum insured will be Rs.5 lakh only. Hence, such restrictions may be the biggest hurdle considering the current cost of hospitalization.
# Premium Issue
This is the contract between the bank and insurance company. Hence, if the insurance company felt the claims raised drastically, then they increase the premium next year. Because it is just ONE YEAR CONTRACT.
In such situations, you may end up with either to cough more premium or stay away from the product.
# Features may change
Like premium, even the insurance company may alter the features while offering next year. Hence, looking at features while buying initially may not work out. Instead, you have to check whether there are any alterations or not. on yearly basis.
# Contract may end or bank may stop this facility
There is no promise from your bank that they provide you such insurance lifelong. Hence, if they feel the insurance company not suitable to them or such service costing them a bit, then they may end up this facility.
Such situation leads you to be away from the health insurance. If such situation arises, then the effect will be horrible for those who are older and unable to buy the individual health insurance separately. They have to end up with NO HEALTH INSURANCE during their age where the possibility of hospitalization is HIGH.
# Banks are not agents
You are buying the product from the bank. However, keep in mind that banks are not agents. Hence, when it comes to service, they may not help you. You have to directly interact with the insurance company.
Hence, never be in wrong belief that Bankers will help you in claim settlement.
# Restriction on entry age
There may be a restriction in entry age. Like in case of Canara Bank Apollo Munich health plan, the entry age is 5 years. However, for dependent children, it is 91 days to 25 years ONLY.
# Check exclusions, Co-Payment or Room Rent Sub Limits
Such plans have a long list of exclusions, co-payment clauses, and room rent sub-limits. Hence, the highest importance must be given to check these features. But Canara Bank’s Apollo Munich Health Insurance has no such limits and clearly explained as No pre-policy check-up, No Sub-limit on hospital room rent and No Co-payment.
# Banks may mislead you
Nowadays banks tied up with many insurance companies to sell their products. In such a situation, banks may mis-sell you the health insurance product rather than such group insurance.
Hence, you must know what bankers offering you. Cross check whether the health insurance they are offering you is group health insurance or individual health insurance (which include family floater). Then only go ahead and buy.
Now you have to decide whether you should go with Health Insurance by banks or go for individual plans separately. If someone has already purchased such plans, then please share your experience so that it may be learning for me and other readers also.
Conclusions-I always suggests having your own policy than relying on such uncertain group products. However, if you are looking health insurance for elders who have some health issues and due to which premium is not affordable or the insurance company denying your proposal, then you definitely opt for such plans.
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