This is the insurance world’s best-kept secret. For the first time ever, Raj Pradhan reveals and analyses the products that can cover you and your family—at the most inexpensive premium

Five years ago, Jagdish Kumar (name changed)wanted to buy mediclaim for his family. He spoke to many agents to get information on different policies. He found it a challenge to get coverage for his parents at the budgeted premium. That is when someone suggested the family floater mediclaim as an option. The premium rates for family floater policies were a minimum Rs20,000 per year for Rs5 lakh sum insured (SI). Jagdish thought of settling for a lower sum insured, to remain within his budgeted premium.

But then he happened to visit a nationalised bank for some routine bank work and discovered something startling. The bank was offering family floater mediclaim (including coverage for parents) for an annual premium of Rs12,000 to its customers. The insurance policy was from a government insurer. There were no medical tests; premium rates were not age-specific; there was no co-pay (the part of the medical expense to be borne by the policyholder); and no loading (premium increase) in future years due to claims. The bank manager was not hard-selling the product, unlike unit-linked insurance plans (ULIPs). It seemed to be a perfect match for his requirements and he signed up to ensure that his family is protected for healthcare costs.

Soon, he realised that the insurance cards he was supposed to have received from his third party administrator (TPA) had not reached him. These cards were an important document proof for getting cashless services during hospitalisation. The policy was supported by only one TPA and, hence, there was no option of getting a TPA of his choice. It took a long time and a lot of calls and continuous follow-up with the TPA based in another city to get insurance cards. The next hurdle was at the time of policy renewal. The auto-debit feature did not work. Jagdish issued cheque payments before the expiry of the policy. The cheque had to be from the same bank as the policy was only for accountholders. In the following year, Jagdish did not receive a renewal letter. However, he remembered the expiry date and sent the premium payment well in advance. The insurer did send him an acknowledgement of the premium receipt each year and, hence, it was the proof of continuous policy coverage.

Earlier this year, Jagdish’s father had to undergo a minor surgery. He found that the insurer did not offer cashless facilities at his chosen hospital. Nevertheless, Jagdish decided to opt for reimbursement and went ahead with his father’s surgery. The claim was submitted on time, but getting the payment was a hassle and needed many calls to the TPA’s office over a period of three months. After nearly three months, Jagdish received his claim payment and was relieved. He soon realised that the insurer had hiked the premium by 30% for all customers. It did pinch his pockets, but he felt it was understandable, since the hike had come after a period of five years. The altered premium rates were still 20% lower than the market rate for retail mediclaim. Jagdish does not want to let go of the policy at this juncture.

He and his family have served their mandatory waiting time with the policy and now they don’t have to worry about pre-existing disease (PED) coverage. Neither are they pinning too much hope on mediclaim portability that is supposed to commence from October this year.

Best-kept Mediclaim Secret
No, the story has no catch. One of the best-kept secrets of the insurance industry is the extraordinary mediclaim deals that you get from nationalised banks. To repeat: coverage for the family, no tests and no escalation. We have checked what’s available and are happy to report that for unbelievably low premium rates, you are getting great health covers. A family floater covering the account holder, spouse and two children of Rs5 lakh sum insured is available for a premium of just Rs7,000. It is a steal. The premium for a majority of them have not risen in many years and is often still 50% lower than buying the policy directly from the insurance company.

In an era of high healthcare inflation and corresponding mediclaim premium hikes, it is unreal to find policies with premium that is 50% lower than the market rate. What is even more unbelievable is that the premiums are the same for all ages; there are no medical tests; no increase in premium due to claims (loading); parents can be covered; no co-pays; entry age up to 65 years (even up to 80 years in one case); coverage is up to age 80; and the benefits as good as (or even better than) those of retail policies sold directly by insurers. The best part is that one only has to be a bank accountholder to get these products. These are good options for those who don’t mind a little bit of inconvenience in service and are prepared for a reimbursement of claim instead of a cashless facility, despite the fact that a cashless facility will be offered for hospitals on a preferred provider network (PPN).

We know of a veteran agent working for United India who himself had a United India policy. He took a family floater mediclaim from the bank where he had an account and stopped the United policy. Of course, service is poor sometimes. As long as you are able to tenaciously work your way through the system, the bank mediclaim options are worth exploring.

Why hasn’t anyone told you about this?
Banks have not trained their branches to sell them. There is lack of commission for bank employee to sell mediclaim. Most branches did not have the product brochures. In other cases, the bank staff hand out brochures without knowing what they are selling. We tried to get a soft copy of these brochures by email or download it from various websites, but could not. A bank employee who knew about the policy believes that customers should not be encouraged to open an account just to benefit from the mediclaim. According to him, “It should be the other way round. Bank mediclaim should be an additional benefit for doing business with the bank.” But there is nothing much banks can do to stop a person from opening an account with a minimum balance just to get the benefit of these products. Isn’t that so?

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