The group health insurance contract offered by banks has just become more attractive!

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Group insurance is not only offered by your employers, but even banks can offer a group health insurance plan to all of its account holders.

With the Covid 19 still crouching on your shoulders and breathing heavily on our necks, health insurance is surely something that we want to ignore or even delay. So, if you have been considering a health insurance plan, you may want to consider the group health plans offered by your bank.

Group insurance is not only offered by your employers, but even banks can offer a group health insurance plan to all of their account holders and most private and public sector banks offer insurance plans. group health insurance to their account holders.

These plans are generally intended for specific coverage and are not as customizable as an individual health insurance plan, but the premiums are certainly cheaper and often have pre-existing coverage from day one. This is what makes a group health plan offered by a bank very attractive. There is also a tax advantage under Article 80D for the premium paid.

In recent years, banks were allowed to partner with 3 insurance companies in the life, general and health insurance sectors respectively. Thus, there are several insurance partners so that all bank account holders opt for the group health insurance plan.

Recently, the Insurance Regulatory and Development Authority of India (IRDAI) introduced the concept of portability in group health insurance schemes offered by banks. This is good news for account holders as the ease of porting would allow them to choose between the available plans offered by various partner insurers of the same bank. But, before we delve deeper into the latest guidelines issued by IRDAI in this context, let’s take a look at some of the common features of these group health insurance plans –

Characteristics of group health insurance plans offered by banks

The group health insurance plans offered by public and private sector banks have the following main characteristics:

  • Coverage is usually set by the insurance company. In some cases, customers may also be allowed to choose the sum insured from the options available only
  • The policy premium must be paid by you, i.e. the account holder for which you can claim an income tax deduction under section 80D
  • Coverage is only available to existing bank account holders and you can take advantage of the cover as long as you hold an active account with the bank
  • Premium rates are quite low compared to individual health plans
  • Coverage can also be extended for dependents at an additional premium
  • Pre-existing conditions are usually covered from day one with no waiting period. However, some plans may have a waiting period which is generally low.
  • There is no prior police medical examination, as it is usually based on a declaration of good health

Now, after the new regulatory change, what’s in it for account holders?

The new IRDAI regulation

In a circular dated October 7, 2020, IRDAI authorized the benefit of portability in group health insurance plans offered by banks. In its guidelines, IRDAI clarified that account holders can choose to change the insurance company of the group health insurance contract they hold with their bank.

This portability advantage is however subject to the following general conditions:

  • You can transfer or change your existing health insurance plan to another insurer only if the insurer offers a group health insurance policy to customers of the same bank.
  • Carrying is permitted between indemnity-based health insurance plans only.

What Are Compensation Health Insurance Plans?

Compensation plans are those that cover actual medical costs incurred.
So, if you are covered by a group indemnity health insurance plan provided by your bank, you can switch to another indemnity health insurance plan with the same bank but with a different one. insurer.

The porting of the policy would be voluntary on the part of the account holder. Portability would only be allowed if the policyholder sends a request to the bank and / or insurance company to transfer the existing policy

Carrying is only authorized at the time of renewal. You will need to submit a transfer request at least 30 to 45 days prior to the policy renewal date.

Since these guidelines are effective immediately, you can choose to transfer your existing group health insurance policy if it needs to be renewed.

Time for good news for healthcare clients of banking groups?

Yes. IRDAI’s new orientations have made the group health plans offered by banks more attractive to account holders. Now, account holders can choose a suitable insurance plan from another insurer if they are not satisfied with their current coverage or service. This porting is free and gives policyholders the choice of the policy they can take out so that their coverage does not end. Moreover, this change could give a boost to the penetration of health insurance in India so that more people can get the coverage without having to worry about continuity.

By Dhirendra Mahyavanshi, Co-Founder, Turtlemint (an insurance company)

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