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Bank Mediclaim: Are they bankable?

The pros and cons of these policies

If you feel that a family floater is the right policy for your requirements, it can be purchased from banks offering mediclaim—here are the advantages and disadvantages:

Advantages:
•    Unbelievably low premium rates that are 50% lower (in many cases) than a family floater policy directly from an insurance company.  
•    Many products don’t need a medical test even at a higher age.
•    Many products have the same premium for all ages and, hence, are beneficial for the older age group—which costs a lot if purchased directly from the insurer.
•    There is no loading (in most cases) and, hence, it is a great option for those with health risks as the claims will not impact future premium rates.
•    Some products cover parents and that too at a reasonable premium.
•    Almost all these family floater policies can be renewed till the age of 80.
•    The benefits and features are as good as policies sold directly by insurers.
•    Having an account with a bank is the only eligibility criterion.

Disadvantages:
•    Bank mediclaim product is not a ‘push’ product; interested persons will have to follow up with banks to get information, submit a proposal form and again follow up with the bank to have the policy issued.
•    There is no agent or broker involved. Renewals of policy, claims filing and follow-up with the insurance company will have to be done by the policyholder. The bank won’t help at all.
•    Inexpensive bank mediclaim policies are offered by public sector insurers, which means dealing with a TPA is a must. Trying to get a TPA card may be an uphill task in some cases.
•    Many products have only one or very few TPA options.
•    The TPA has an agreement with individual hospitals for cashless facilities. If the TPA servicing you does not have an agreement with the hospital of your choice, you will have to forego the cashless facility and settle for the reimbursement of a claim, which carries a risk factor of claim rejection or amount deduction.
•    Most of the policies don’t have a ‘no-claim-bonus’ (NCB).
•    A couple of policies offering low premiums have increased premium from this year by 30% and others may follow sooner or later.
•    It is possible that banks may end the product offering due to various reasons. As such, mediclaim products are a one-year contract and, hence, there should not be a problem as long as the IRDA ensures that the existing policyholders are moved to other mediclaim products with waiver of the PED waiting period.

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