Should You Consider the Health Insurance Provided by Banks Under Group Health Insurance?


Bank insurer sitting with client in grey coat - bank health insurance policy comparison

What, according to you, is the most valuable thing that is secured by banks?

The answer surprisingly is “our Health”.

Other than securing our valuables, banks also secure our health.

But does this bank health insurance policy provide enough features and coverage?

Let’s understand this, through a real-life incident that happened with Mr. Prateek and his father.

Prateek wanted to insure his father’s health. He found out that a few PSU banks are offering affordable Group Health Insurance Plans to their customers.

So what he needs to do, is first open an account in the name of the insured, which is his father here.

The next day, Prateek opened an account with one of these banks and was happy to insure his father’s health at a very nominal premium.

Next year, at the time of renewal, he was surprised to see a sky-high premium amount. It was nearly 5 times the previous year.

After discussing his concerns with one of the bank representatives, he said, “ I am shocked to see my premium this year.”

The representative said, “Sir, since you were covered under the Group Health Policy that we offer to our customers, so as per last year’s overall claim ratio, there is a surge in premium.”

But, we have not consumed even half of our total insured amount!

Representative: He explained further that, the premium in this policy is not defined by the individual contribution but rather by the group health policy as a whole. The overall performance (i.e. Claim settlement ratio) will affect the bank health insurance premium for next year.

Prateek understood everything, and now he knows there is no point in continuing with this policy.

He called an insurance broker, explained the requirements, and, insured his father’s health and insurance company.

To cut the story short, there are two main limitations to going for retail insurance provided by banks.

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When you make bank health policy comparisons with regular group mediclaim policy plans. One, pre-existing diseases are not covered, and second, since we are a part of group Health policy the next year’s premium will depend on the overall policy’s claim settlement ratio.

It’s the case with every individual while taking group health insurance we always look up for the policy which offers less premium but we are never serious enough to get into details. It’s a matter of our health, let us not buy health insurance just for buying it. Health insurance is that powerful weapon that will prove its worth during the most perplexing time of our life.

‘A stitch in time saves nine, but only if we do it in the right way. So, it’s always advantageous to go with normal retail health insurance as it can be customized as per your preference.

See the table below to make it more clear.

Benefits Normal Health Insurance Health Insurance through Banks
Pre-Existing covered No No
Nature of Premium Fixed (Annually) Not Fixed, depends on overall Claim ratio
Insurance companies All private and PSU companies Only through limited Banks
Insurance Plans Choose from a wide range of insurance plan Very limited options to choose from

Don’t forget to take guidance from your health partner, your insurance broker.

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Susheel Agarwal