Should You Buy Health Insurance From Your Bank? Know The Pros & Cons

Posted on: Sep 6, 2024 | 3 mins | Written by: HDFC ERGO Team

Should You Buy Health Insurance From Your Bank? Know The Pros & Cons

While thinking of overall good health and financial sustenance in the future, health insurance becomes intrinsic to the scheme of things. But did you know that you can conveniently buy health insurance through your bank? In India, several banks, including HDFC Bank, offer health-related products through a tie-up with insurance companies. If you need health insurance for yourself or your family, your bank will get you through it clearly and securely. By choosing health insurance from your bank, you ensure that you’re protected while enjoying the convenience of managing your finances and health in one place.

What is Bancassurance?

Imagine yourself sitting in your local bank, maybe HDFC Bank, to make a deposit or to inquire about a loan. Imagine knowing that you could even discuss health insurance options during your whole stay there, whether waiting in line or not. Yes, it's made possible through something called Bancassurance.

Bancassurance is simply a relationship between a bank and an insurer. This relationship enables the bank to sell insurance products to its customers. So, when you purchase health insurance from your bank, you are not entering a contract with the bank itself. Rather, your contract is with an insurance company that has tied up with your bank. In a way, all the bank does is act like an intermediary or a facilitator, which enables you to access insurance products as part of regular banking activity.

How does it work?

Take HDFC Bank, for example; for many of the leading insurance companies, such as HDFC ERGO, which have tie-ups with HDFC Bank, the bank would list out all those different options in front of you once you walk into an HDFC Bank branch and express an interest in health insurance. Say you take a health insurance policy from HDFC ERGO.

The following situations could happen:

1. Information and Selection:

The bank representative will give an idea of some or the other health insurance plans. The individual health plans can consist of family floater plans or plans of critical illness coverage.

2. Documentation:

After having considered a plan, the application form has to be filled up along with necessary documents like proof of ID, address proof, and medical history with the premium amount.

3. Policy Issuance:

Once the above underwriting process is completed, HDFC ERGO shall issue the policy; in other words, you contract directly with HDFC ERGO and not with HDFC Bank.

4. Service and Claims:

Should you require a claim at any time, services and claims processing are all done through the insurance company and not the bank. The bank's role is purely to facilitate when you are buying; it is the insurer who has to provide service.

Why Should You Consider Buying Health insurance Through a Bank?

You may ask yourself why you have to buy health insurance from a bank and not just walk directly into an insurance company. Be that as it may, below are a few reasons why this may be convenient for you:

1. Trust and Convenience:

You already trust the bank with your money, so it is easy for you to also trust it with your health insurance. Plus, it's convenient; you can do most of your financial work under one roof.

2. Easy payment of premium:

With most of the financial transactions done in the bank, it makes provisions for an automatic premium pay for health insurance. You will never worry about overdue premiums because they can always be auto-debited from an account.

3. Customised Products:

Products that are mainly sold for insurance by banks are tailored to the bank's customers. For example, if you have a savings account with HDFC Bank, they can also offer or provide you with a health insurance policy, according to your financial profile and health needs.

Benefits of Purchasing Health insurance through a Bank:

1. You can manage all your financial and insurance needs under one roof, ensuring that life is made easy for you.

2. Most of the time, these banks bring out special offers or discounts on premiums that are cost-effective.

3. Since your bank will already have nearly all your details, getting health insurance won't be too painful in terms of paperwork.

4. There are diversified options for health insurance plans, from individual health insurance to family health insurance and others. This ensures that everyone can have a plan customised according to their needs.

Things to Keep In Mind

Although there are few benefits to buying health insurance from a bank, here are a few points to remember:

1. Take time to understand the health insurance policy you intend to purchase. Know what is covered and those not included and how claim processing will be conducted.

2. Remember that though the bank helps you buy the policy, it is not responsible for rendering the insurance service. So, if you have any problem, you will have to contact the insurance company directly.

3. Since the insurance company handles claims, one needs to understand their procedures, sequences of activities, documentation required, and settlement timelines.

4. Find out if the insurance company has a vast network of hospitals. This would be an advantage for you, so make sure that your favourite hospitals are part of the network.

Conclusion

In today's uncertain health world, it becomes more of a mandate than an advisory to take health insurance. So, if you do put a lot of faith in your bank and are looking for convenience, buying health insurance through Bancassurance does seem like the answer. Whether you're looking at single individual health insurance or a family health plan, your bank will offer you plenty of options, considering its tie-ups with the best of the insurance companies.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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