health insurance

Why Is Banking On Group Health Covers Not Advisable?

Even if you have group insurance, it is always preferable to have personal health insurance coverage. This is so because retail health insurance is perpetually renewed; even if the insurer decides to end the coverage, it must compel you to transfer to another. On the other hand, group health insurance covers you until the relationship with the group ends, such as when you leave your employment.

Whenever public sector banks merge, it sends a circular to all general and health insurers. The various insurers will continue to service the underlying group health insurance of the customers of the combined banks until the conclusion of the policy period. IRDAI mentions that banks, acting as the group organisers, are permitted to enter into group insurance contracts with any number of insurers in order to meet the demands of consumers. In order to know how to claim health insurance, you should always be aware of the terms and conditions of your policy, including the procedures for making claims, the documents required, and the timeline for processing. #

Be aware that there is no assurance the acquiring bank will want to collaborate with the insurer from which you have group insurance. In that case, you’ll have to switch to individual coverage, which can raise your premiums. *

The policies are not regarded as being migrated when a bank switches its group policy tie-up from one insurer to another. There is no law that ensures portability, even if you want to move your group coverage to an individual one. Group relationships are not included in the portability guidelines. Only when the application is received 45 days prior to the plan’s expiration will the insurer be required to port the policy. Before being authorised, the project will go through regular underwriting. *

The issue 

The current bank mergers are only one example of how purchasing a group policy is a bad choice. According to experts, the group plans no longer provide the same advantages as they formerly did. Similar terms to those in a retail policy include the waiting period. The waiting period may be three years instead of four. That’s the only change.

Senior citizens may find the situation more concerning because, if they aren’t given a chance to renew their group policy, they run the risk of not being offered individual coverage as well. If they do obtain coverage, the premiums could be expensive. Banks are not required by regulation to continue offering group plans, but my impression is that they may strive to do so. 

Insurers also have the authority to terminate group insurance in the middle of it. A bank and insurance negotiate, and if the insurer believes that its portfolio is losing money, it may elect to terminate the arrangement. Additionally, no new insurer could want to take it on if the losses are really significant. The benefits of health insurance for the customers’ interests were taken into consideration by the regulator without having an impact on their current policy.

You shouldn’t rely solely on group insurance in the interim. Customers’ interests were taken into consideration by the regulator without having an impact on their current policy. However, while individual retail purchases shield consumers from corporate actions like bank mergers, it is advised clients do so instead. Make sure you compare health insurance from various providers before settling on the one that suits you the best. *

Always put purchasing an individual health insurance policy with a sufficient level of coverage first, and if you do feel the need to supplement it, choose add-ons rather than relying on a group insurance plan.

* Standard T&C Apply

# Visit the official website of IRDAI for further details.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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