Should You Buy A Health Insurance Policy From Your Bank?
In a recent circular, IRDAI has allowed policyholders to port their policies from one insurer to another within specified timelines
Kolkata-based Mrinal Das (name changed), 72, who bought health insurance policy from a bank was left high and dry when the bank’s tie-up with a certain insurer ended and the new insurer was offering a product with high deductibles and co-pay. At that point, it was not possible to port such policies. Since age was not on his side, Das had to pay a considerably higher premium to get health coverage.
You can buy health insurance policies online, from your agent or from your bank. However, when you buy health insurance policies from the bank, there are pros and cons to consider.
First let us look at the advantages.
“You should consider buying insurance from banks. There are qualified and trained personnel in banks who can pitch insurance products according to the needs and requirements of customers,” says AlpanaSingh, Head - Bancassurance, Agri and Govt Business, Bajaj Allianz General Insurance.
While banks have policies customised for their customers, they can also offer products from other insurance companies they are partnered with.
This allows customers to choose from a range of generic products from these partnered insurers.
However, there is a flipside too.
“Many customers rely on health insurance policies through their bank partnerships. But these tie-ups are not always permanent, and their closure can leave people without coverage and expose them to risk during medical emergencies,” says Siddharth Singhal, Head - Health Insurance, Policybazaar, an insurance portal.
Retail plans have many advantages over bank-based policies. For starters, they have lifetime renewability, which ensures that policyholders can maintain their coverage for as long as they want to.
Retail plans also feature fewer sub-limits - which allows broader coverage of medical expenses. While policies offered by banks may have customisation, it would be more for retail individual plans.
“The personalisation options available in retail individual plans allows customers to tailor their policy to better suit their particular needs. One can choose to opt for add-ons like outpatient department (OPD), consumables and pre-existing disease (PED) reduction - which can further enhance their coverage,” says Singhal.
It Is Possible To Port Your Policy
In a recent circular, IRDAI has allowed policyholders to port their policies from one insurer to another within specified timelines. Both the acquiring and existing insurers are responsible for transferring all your details and claim history seamlessly.
“As a policyholder, you are entitled to transfer the credits you have earned, including the sum insured, no-claim bonus, specific waiting periods, waiting periods for pre-existing diseases, and the moratorium period, from your existing insurer to the new insurer,” says Singh.
According to PolicyBazaar, after IRDAI's announcement on allowing health insurance customers to port from bank-based policies to retail individual insurance, there has been a notable shift in how people approach health insurance with 15 per cent of health insurance customers opting to port their policies and migrating from bank-based policies to retail individual plans.
So, to sum up, a health insurance policy bough through a bank, has its advantages and it can also mean lower premiums, but it is good to buy a retail policy which adequately covers you and your family.
