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.
Let us first discuss some advantages of such products.
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.
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.
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).
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.
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.
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.
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.
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.
Above we discussed advantages of health insurance by banks. Now let us explore the negative side of such products.
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.
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.
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.
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.
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.
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.
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.
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.
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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Sir, Which Bank health insurance is good to buy...having low premium and good benefits ??
Dear Ketan,
Hard to say as insurance companies usually customize it based on a customer basis. Hence, you have to approach the individual bank to understand the features.
Dear Mr. Basavaraj,
Thank you for the wonderful article and website. You're doing some great work, I must commend your efforts.
I have a question regarding my case, which is a bit peculiar. Appreciate any advise that you can give.
My wife was working in Bangalore in India and I am based abroad. We recently got married this year. However, 1 month after our marriage my wife was detected with Stage 2 cancer of gastrointestinal tract. Neither of us had a good understanding of health insurance and made the big mistake of not purchasing individual health policies.
Her medical expenses for 2 surgeries were covered by her group health policy of National Insurance with sum insured of Rs. 3,00,000/- provided by her employer. However, her diagnosis was made after she had resigned from her job and was serving her 3 month notice period. She was planning to join me abroad. She is currently undergoing chemotherapy.
Before her last working date, we got the group health policy ported to a family floater plan with the same sum insured with National Insurance.
I wanted to buy additional insurance for her and realized that no insurance company was ready to entertain since she has already been diagnosed with Cancer. So I ended up purchasing additional health insurance from Star Insurance, the policy is called Star Cancer Care gold with sum insured of Rs. 5,00,000/- of which Rs. 2,50,000/- can be used for cancer related treatment after waiting period and the balance 2,50,000/- is for any other illness aside from cancer.
I just want to take your opinion on whether we have any other options left to purchase additional insurance for her. Can we approach a bank with which she has an account and opt for health insurance plan provided by the bank for its customers?
Many thanks in advance for your kind advise.
Dear Bhat,
It is heartening to hear your story. Whether you checked the employer-provided health insurance provider that after porting to an individual plan, her existing disease (cancer) treatment is covered or not? Also, whether you informed to Star health while buying that she was diagnosed with such illness? If so and Star health still issued the policy, then please cross check once again that is there any waiting period or exclusion in that star health policy.
Regarding other options, sadly NO other options left for you.
Dear Sir,
Many thanks for your reply.
1) Yes her individual plan covers cancer treatment also. But we will increase sum insured after 1 year. Currently we are covered upto Rs. 3 lakhs.
2) Yes Star Health is aware of her condition as they have gone through her report. Star Health have a specialized plan for cancer patients called Cancer Care Gold which is what we have opted with Sum Insured Rs. 5 Lakhs. The policy is divided into 3 sections as follows:
Section 1: Covers recurrence, metastasis, and/or second malignancy - (Sum Insured sub limit Rs. 2.5 lakhs, waiting period 30 months)
Section 2: Covers Surgery and Interventional Therapy (Other than cancer and cancer related ailments) - (Sum Insured sub limit Rs. 1.5 lakhs, waiting period 30 days)
Section 3: Covers Non-Surgery and Non-Interventional Therapy (Other than cancer and cancer related ailments) - (Sum Insured sub limit Rs. 1 lakhs, waiting period 30 days)
Anyway many thanks for your time and valuable suggestion.
Dear Bhat,
1) That is great but I think while enhancing they include the waiting period for this existing disease. Hence, be sure about exclusion.
2) I suggest you to opt for super top up along with the existing this Star for at least Rs.25 lakh.
Dear Mr. Basavaraj,
Many thanks for the valuable advise, much appreciated. Sorry for the late reply.
From your suggestion I understand that I must build a separate corpus with short term view which should be liquid in case we require larger sum than sum insured.
Dear Bhat,
That will be sensible as you are knocking the health insurance company when you already have suffered.
Any idea, if any of such health insurance offered by bank considers proposer+ spouse + 3 dependents kids for family floater?? (Most of such plans consider max 2 kids)
Dear Janu,
Sadly NO.
how is SBI General Health Insurance.
Dear Utpal,
Do remember that SBI Bank is different and SBI General Insurance. Hence, don't buy just because SBI name is associated.
Dear sir
is the possible that one bank medical policy port into another bank medical policy...and another bank medical family floater policy port into single person medical policy...pls advice us..
Dear Ravi,
Sadly NO.
Sir, Previously Iam having health Insurance plan in Oriental insurance now Iam planning to shift to Cigna ttk Health Insurance tie up with Andhra Bank this is a family floater can I go head with or can I drop this idea
Please give me some information regarding Iam very Thank full to you
Dr.Chakrapani,
What prompted you to go for this decision?
these bank claims that even their contracts with the exiting insurance company vanished ,they would shift you to new insurance and pre exiting clause will not matter then as if u have passed the 3/4 years in earlier insurance according to earlier health insurance provisions, but it could be disastrous if u come across cancer and with that insurance company and bank contracts voids unfortunately that year and new insurance with which bank have now have new contract would definitely decline your entrance to his insurance risk club.. am i right Basavaraj Tonagatti?
Dear Arun,
You are completely right.
Bank of Baroda has discontinued their Baroda health policy given to its account holders. This is for e everyone's information.
Dear Sebastian,
Thanks for your sharing. This is the biggest risk they pose to us.
Basuji, thanks for ur gr8 blog. I had family floater policy of 5 lakhs with BOIn NIA for last 11 years. Till last year premium was approx 7800/ n co has discontinued tie up with BOI n now asking to port it to their policy with pre of 27000/-. So what u suggest abt disadvantage with policy with bank tie up is very much true
Dear Kulkarni,
Check alternatives with other insurers for premium and features, then move on.
Dear sir,
My policy baroda health 5 lac floater is terminated on 15th Dec.
If i go for 3 lac retail my premium starts from 22000 ro 26000 i.e cover is not sufficient at the age of 52 of mine and my wife and 17 yr old son
If i go for pnb new india bank floater prem is 5 lac is 10213 and i go for canara bank appolo munich group ins.policy of 5 lac prem is 14517. This policy has 10 per no claim bonus upto s.i.,restoration upto s.i.,life long renewal
Comparing both above which is better. At age 52 i go for retail or bank policy
Pl reply. Awaiting for your reply.
Dear Mukesh,
If budget is your problem, then go with the bank provided health insurance where the guarantee of lifetime renewal.
I heard about this as a non-portable.
Dear Ravi,
Yes. But the same insurer may offer you the product individual product.
Thank you for a good educative article. I am salary account holder with andhra bank. I took their floater policy(Arogyadhan) for my family. Can you tell me whether their policy is having the copay or room rent sublimits, if not where can I get the information.
Dear Ravi,
It is better to discuss the same with the bank.