Mediclaim post-45: How low can it go?
When you turn 45, health insurance costs can swell significantly, but not if you buy it from your bank, which usually doesn’t care what age you are, even if you’re hitting 75.
It’s not well-known that banks sell health insurance. Why it should be better known is that these plans are offered at a significant discount than those sold directly by the insurer. This is despite the fact they are usually sold by either National Insurance or New India Assurance, in case you are wondering about the likelihood of claim settlement. The reason for the discount is simple: insurers can sell policies in bulk via banks. Sadly, these plans are not heavily promoted, perhaps because bank officials lack the knowledge to sell these products to their account holders. In any case, here’s all you need to know about bank health insurance, when to buy it and its drawbacks.
Not until you’re 45
Health insurance from a bank is much like being insured via your employer. So there usually isn’t a health check-up and if there is one, it won’t be when you’re 45, but probably when you’re 55 or even 65 years old. What’s more is that these plans usually insure your whole family (spouse and two children), so any rate comparison should be with family floater plans, which cost slightly more than individual plans. Another similarity with group insurance is that premiums aren’t age-specific, so no matter what your age (usually until 65), you’ll pay the same rate. With Punjab National Bank, it doesn’t matter if you’re 3 months or 80 years old, the cost is the same. The big drawback of this is that the younger you are, the less likely you’re benefitting – in fact, you may be paying much more than you would if you insured yourself through the direct route. Here’s how much you would pay through both routes if you insured yourself with a bank at the age of 30 and 40:
|From Bank||Up to 45||From Insurer||At 30||At 36||At 41|
|Canara Bank||Rs7307||United India||Rs8971||Rs10725||Rs10725|
|Corporation Bank||Rs8171||New India||Rs6966||Rs7865||Rs10337|
|Punjab National Bank||Rs6705||Oriental||Rs6661||Rs7738||Rs12452|
|Bank of Baroda||Rs7079||National||Rs8499||Rs9517||Rs9517|
So, with the three public sector banks mentioned above, you actually end up paying more in your younger years because group plans balance out the added risk derived from the low premiums being paid by the older people in the group by charging higher rates to the younger people in the group. Once you turn 45 years, though, the age at which insurers start raising their rates significantly, it’s time to switch to the group plan because the savings become massive, as you can see in the table below:
|From Bank||From 46-80||From Insurer||At 46||At 51||At 56|
|Canara Bank||Rs7307||United India||Rs9873*||Rs9873*||Rs13958*|
|Corporation Bank||Rs8171||New India||Rs16854||Rs19663||Rs22472|
|Punjab National Bank||Rs6705||Oriental||Rs12211||Rs12211||Rs14955*|
|Bank of Baroda||Rs8848||National||Rs16525||Rs17771||Rs20638|
(* from myinsuranceclub.com)
It doesn’t matter how cheap your insurance plan is if your claim isn’t settled. So you’re probably wondering if there’s anything different between a plan bought from a bank and one bought from the insurer directly via an agent. The following few points will clear your doubts.
Common terms: There’s no difference between the terms and conditions. You get the same plan, with the same sub-limits, as you would if you were buying directly from the insurer.
Low coverage: If you bought a plan directly from your insurer, you can insure your family for up to Rs10 lakh, in case of United India Assurance. With your bank, however, you can buy insurance of no more than Rs5 lakh, which you may find insufficient.
No porting: This could be a major problem. The Insurance Regulatory Development Authority (IRDA) recently made it possible to port your health insurance plan. This means that if you’re unhappy with your current provider, you can move to another insurer (provided it’s willing to have you) without having to wait three years for pre-existing illnesses to be covered. This new IRDA rule, however, does not apply to bank health insurance. This means that if you are unhappy with the insurer your bank has tied up with or, for some reason, the bank severs its tie up with the insurer, you would have to wait out the pre-existing illnesses period (usually two to four years) once more, which could work out to be very costly.