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Health insurance for parents

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18 Jun, 2021 by  Sai Swagath

Hi team,


I am Swagath from Chennai.


I need some clarity on the Health insurance policy bought through a bank as a customer (Bank savings account customer)


Parents age - Father 58 and mother 49

Father has a fistula complaint and Mother has BP.


I am planning to take it through Citi union bank in Chennai which is tied up with Star health and most importantly it has a waiting period of only two years for any pre-existing condition and the premiums are cheaper compared to its regular policies. It really got me excited and wonder how come the premium is cheaper and the pre-existing waiting period is also lesser.


Request you to advise me of the pros and cons of buying through the bank.

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Parents-Health-Insurance
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1 Answer

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20 Jun, 2021

Hey Sai,


There are pros and cons for buying health cover from bank. Here's a quick list:


Pros:

  1. Premiums are significantly lower than any similar plan available in market because bank negotiates better rates exclusively for its customers/accountholders.
  2. The plan also has lower waiting period as the product is customized for bank customers.


Cons:

  1. Bank is at discretion to change or withdraw the health plan or change the insurer at any point in future.
  2. In case of a bank merge/acquisition, such plans are at risk of discontinuation.
  3. Since these are technically Master Group Policies, the premiums can change very widely every year of renewal due to claim experience of the insurer. Unlike in retail plans where you can have some idea of the premium across age bands, you will or cannot get that assurance from a bank policy.
  4. If you are dissatisfied with your bank's plan or you find a better plan elsewhere and you would want to port your policy, you will not be able to do so since you have the bank policy. Group policies (customized policies) cannot be ported. What this means is that you will lose the entire benefit of holding the policy for several years and if you switch to another plan, your waiting period starts from zero.


Net net, bank policies are not recommended by me due to following reasons:

  1. No choice
  2. uncertainty regarding product continuation or premium guidance


Bank policy only recommended if affordability of premium is your concern, because any day bank policy would turn out to be cheaper than a retail plan. So one can compromise the freedom for lower cost of cover.


Happy to answer any followup questions.


Anuj

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