Sister Nirmala Sitharaman,
*IBA Group Medical Insurance Scheme for Retirees:*
There are lot of queries about renewal of IBA Group Medical Insurance Policy for Retirees. The cause of concern is quantum jump in insurance premium year after year. It is difficult to give a straight Yes or No answer.
It depends upon various factors-Individual’s choice, health condition of Self and Spouse, Financial Condition, ability to pay the premium or ability to meet hospitalization expenditure as and when happen, availability of alternative cover or options for joining any better health cover Scheme.
To help the Retirees to arrive at a decision, at best we can discuss the pros and cons of the available scheme, pros and cons of not joining and what should be looked at the alternatives and what best one can hope on this important issue.
*Need for Health Insurance:*
Now a days in Financial Planning, Health Insurance occupies the top slot even for youngsters, as ever increasing Hospitalization expenses either make a big dent in the wealth corpus or create a huge liability to the individual or his family.
Especially it is a must for Senior Citizens. Any Health cover with affordable premium will be a cushion. Some may prefer to create a buffer amount exclusively for this purpose to avoid paying premium year on year. It depends upon health and individuals’ choice. Looking at the present cost, In some cases, with adverse health history, a cover of Rs 4 lakh may not be sufficient and one may need, either to have a cushion or Super top up Cover.
*Pros and Cons of Present Group Insurance Scheme:*
Merits:
1. Pre Existing diseases covered. No waiting period.
2. Decent Room Rent and ICU per day charges.(Room Rent enhanced to Rs 4000 to Rs. 5000 per day)
3. No hidden clauses or riders. Standard exclusions.
4. Cover limit is per year. Not aggregate limit for life time. The advantage is that persons with adverse health condition can avail year on year.
5. It covers all ages including very Senior Citizens above 80 years. Individual Cover may not be available from other insurers for very old age.
6. Renewal option is available irrespective of claim history. Some Insurers may not opt to renew based on claim history or put adverse conditions or add additional loading factor on premium .
7. No major hiccup in claim process and the feed back so far suggested comparatively hassle free approval of cash less claims.
8. One need not be apprehensive about full disclosure of health history as in the case of other individual /group covers.(Policies for Bank Customers). Any inadvertent omission may lead to claim rejection in other cases.
9. Premium eligible for Deduction under Sec 80 D (this is available for covers with other insurers too)
Demerits/ Cause of Concern
1. Ever Increasing premium with quantum jump year on year.
2. As premium is based on claim ratio, naturally this is bound to go up as the group consist of aged people who are prone to frequent illness. Unless the group is harmonized with existing staff, the premium quote is to be high.
3. Unless Bank subsidies the premium , it may be out of reach for many of the pensioners/family pensioners as pension updation is long overdue. It is pathetic that the premium is more than the monthly pension in most of the cases.
4. Policy with Domiciliary option - not fit to be opted as it is not an insurance product. The additional premium is more than the reimbursement domiciliary ceiling and for the net less cover available for hospitalizations, one has to pay higher premium amount.
5. Option is like Pension option. Presently , those who have opted out cannot join back. (though last year they have given option to join) For Super Top-up, there is a provision to join at the time of renewal.
What Best One can Hope for
1. In future at least, IBA should call for quotation, treating Staff and retired staff, as a single group. This way there will be a less burden on retirees on annual increase in premium. Bank should debit their account and pay premium for staff and Retirees, who have opted. For Retirees premium can be recovered from their account (Balance can be blocked or out of loan proceeds)
2. Pray for exemption of GST from health Insurance premium.
3. Substantial subsidy from the bank as a welfare measure.
4. Periodical option to join the scheme after a gap of every three or four years.
What one can do?
1. If alternative health cover is available one can continue that. Depending upon the need and coverage one can consider either renewal of IBA Group Insurance or opting out.
2. If there is no other health cover available and options are limited in getting external cover and persons with adverse health history can consider renewal depending upon affordability, need and comfort.
3. Another option, is to create buffer amount exclusively for hospitalization expenses out of yearly health insurance premium saved. But one has to wait eight to nine years to create corpus of Rs 4 Lakh (out of savings from yearly premium) and in any eventuality of hospitalization with in that period may wipe up out that savings and further hospitalization expenses would be a big financial burden with out health insurance cover.
4. Those who have decided to opt for renewal can skip domiciliary cover option. Like wise they can evaluate depending upon need whether to go for Super Top up. As it is, there is a provision to join Super Top Up in future renewals.
5. Those who have decided not to renew or who are not afford to renew can wait for any future opportunity (if given) to consider and join, if any option is given in future to join back. (If at all given.) Last year they have allowed to join. If there is any drastic change in Scheme like group mixture, subsidy one may hope that option would be given though it is not guaranteed.
6. For those in Income Tax Brackets, and not covered under health insurance Scheme can claim exemption under Sec 80 D for General Medical expenditure incurred up to Rs50,000/-(Self and spouse - Sr Citizens)
What are the points to be checked before buying Health Insurance Cover?
1. Compare Premium. Check whether it is floater policy or individual policy. Check for any rider or adverse clause.
2. Check for Coverage of pre existing diseases and if not the cooling period for pre existing diseases. For most of the policies waiting period is 24 Months. But the risk is there might be a hike of premium after that period.
3. Check for the maximum age coverage. Check the pattern of future premium hikes- whether based on age, claim history etc.
4. Check for Co-pay clause and its percentage.
5. Check for per day room ceiling as most of the hospital expenses are linked to room rent and a lower room rent ceiling will indirectly increase the copay.
6. An optimum Health insurance must take care of mainly, Cover for family Members, Cashless treatment, Cover of pre-existing diseases after certain period, Hospitalization expenses, Pre and post treatment expenses cover and critical illness riders.
7. No claim bonus by reducing future premiums or return of part of premiums at the end of policy is also a feature which one should look for.
8. In case of Group Insurance Scheme linked to Bank accounts and sold by banks check the maximum age coverage.
9. In all policy proposals, including Bank Schemes, take care to disclose the medical history for self and spouse with out omission. Any inadvertent error may result in claim rejection at a later date.
Let us pray for good health of all retirees. It is a universal wish of elders is to leave this earth with out giving much trouble to others and with out being bed ridden.
For those who took the cover and did not incur any claim on that, should thank God and be happy that they have contributed to the welfare of fellow retirees in reducing the claim ratio !
Credit -
(R Vijayaraghavan)
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