We love bundled products. If something is coming with something else, nothing like it. Those who sell you financial products know that, and so you have a product that bundles fixed deposits (FDs) with health insurance. It might look like a great deal, but it is not. Also, as is a basic rule of personal finance, it is never a good idea to mix investments with insurance, whether it is health insurance or life insurance.
Difference Of FD-linked Policies To Standalone Health Policies
If you compare FD-linked insurance to standalone health policies, the differences are significant in terms of both protection and flexibility. Standalone health insurance policies are built specifically for comprehensive medical coverage, with wider sum insured options, broader disease coverage, and additional features like no-claim bonuses, wellness benefits, and lifelong renewability.
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“With standalone insurance, you can tailor things based on your age, health history, family size, and other needs. They usually also cover pre-/post-hospitalization, daycare procedures, and critical illness add-ons. Most importantly, they offer portability between insurers and continued coverage irrespective of financial products like FDs,” says Pankaj Nawani, CEO, CarePal Secure.
FD-based covers, on the other hand, offer limited customisation. They are usually issued as group policies with fixed terms and conditions that apply uniformly to all account holders. The sum insured is often much lower, and the scope of coverage is basic.
Why You Need To Be Careful
“Bundling health insurance with fixed deposits may look appealing, but read the fine print. Most bundled offers provide a basic amount of health cover, but the coverage is limited; it may be calendar days, sum insured, or the types of diseases. In most cases, the maximum insurance cover is the duration of the FD, and the claims process will likely be more complex than that of standalone health insurance,” says Kunal Varma, founder and CEO, Freo.
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The bundled cover is useful for someone who doesn't have any health insurance at all and is a good add-on in conjunction with existing cover, but it should never be seen as a replacement for full-cover health insurance. If you want to insure yourself for the long term, and with flexibility, standalone health insurance will always be the choice!
