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With healthcare costs spiralling consistently, there is a strong need for good insurance cover. But for most, it is quite expensive, especially if you are a senior citizen.
While the common routes to buying insurance are online or through an agent, there is a third route, which is cheap. These are group policies offered by banks through their insurance tie-ups for their account holders.
Banks that offer such tailor-made policies for their customers include Syndicate Bank in tie up with United Insurance Company, Bank of India and Bank of Baroda both with National Insurance Company and Union Bank of India with New India Assurance.
Such policies are better for senior citizens who may find higher premiums from general insurers a deterrent. It is also possible that a senior citizen might not get health insurance from an insurance company, says an official at of the PSU banks. "Another advantage is that even senior citizens need not undergo any medical tests while buying the insurance through the bank,'' the official adds.
The premiums are definitely much cheaper because these are group policies. For a 65-year old, a health cover of Rs 3 lakh is available for an annual premium of Rs 4,000-7,000 through the tie-ups with the PSU banks. But a similar policy bought from health insurance companies (both nationalised and private), will cost between Rs 11,000 and Rs 16,000, according to data from Policybazaar.com.
But there could be drawbacks as well. According to Arvind Laddha, chief executive officer (CEO), Vantage Insurance Brokers, if the bank discontinues the tie-up with the insurance company, then the customer could lose the track record of 'no claims'. Porting could also be difficult, as the policies are tailor-made for each bank.
As a precaution, Laddha advises, one should buy another policy of a lower amount, as a buffer. For instance, if you want a cover of Rs 5 lakh, you can take a policy of Rs 3 lakh through the bank's scheme and another policy of Rs 2 lakh from a health insurance company. This will help even if the bank discontinues its scheme and you are left with only one policy.
According to Yashish Dahiya, founder and CEO of Policybazaar.com, these are group policies, and that is why it is possible for banks to offer these to senior citizens at cheaper rates. But at the same time, these could work out to be more expensive for younger people.
"If for some reason, you are not able to get a health policy from anywhere, maybe due to age or some health-related reason, this is a good option, since you are getting a health cover at a cheaper rate. But, if you can get a health policy from anywhere else, then you must not opt for it,'' Dahiya says.
Another official from one of the insurance companies says while the buying norms are more relaxed and pricing cheaper compared to regular policies, they may not be able to provide good services.
"A regular policy will be better serviced since it is bought through an agent. In a tailor-made policy, the policyholder will have to follow up with the bank officials for claims. And the bank officials may not have the time to respond, or may not know about it since it is not their core area of work,'' he explains.
