Title-Free Health Insurance from Service Providers Not an Alternative for Regular Policies

As important is buying a health insurance cover, it is also important to buy a suitable one and not just any available plan to cover yourself and your dear ones. But with raining health insurance plans in the market, it can be a daunting task to choose the relevant one. Also, one should not just be driven away with the advertisements that force to buy health insurance. But what if an insurance plan offered to you is for free?

Lately, IRCTC (Indian Railway Catering and Tourism Corporation) has launched a free insurance cover for the New Delhi-Lucknow Tejas Express. Currently, IRCTC provides insurance cover for e-tickets that are booked online, charging a fee. The e-tickets are either booked online or through an application. Until August 2018, IRCTC offered free and compulsory insurance cover to every ticket holder.

Another example is of Uber that offered free personal accident insurance to every rider. Even Bharti Airtel has been providing life insurance cover of Rs. 4 Lakh worth its Rs. 249 prepaid plan. Before this, OYO was the one to introduce a complimentary personal accident cover worth as well as baggage loss cover worth Rs. 10 Lakh for every guest staying in OYO homes, OYO rooms and other stay facilities offered by OYO. This helped the guests during cases of accidental hospitalisation or even loss of baggage for as long as they stay. ICICI Bank is another one to also join the free insurance bandwagon by offering a complimentary critical insurance cover for 33 illnesses for at least a year to all the Fixed Deposit holders who have FDs for at least 2 years. It has also introduced a product named ‘FD Xtra’ that provides a complimentary life insurance cover for a year to those who invest in FDs worth Rs. 3 Lakh for a minimum period of 2 years.

On this, the Executive Director of ICICI Lombard General Insurance Sanjeev Mantri shared, “With the emergence of lifestyle diseases amid rising medical treatment costs, a health protection cover is no longer an option, but a necessity. With the unique dual proposition offered by ‘FD Health,’ you can stay covered against medical expenses, without having to liquidate your savings.”

However, on this ongoing trend, the insurance industry believes that the population will get a taste of health insurance with such free products in the market and therefore would be potential customers of holistic policies in future.

But here comes the devil in the matter that free insurance policies often come with validity or usage norms. In case you fail to follow them, your claim would be stated invalid.

Also, the claims here have to be reported to the services providers like Uber and IRCTC etc. in this case. They won’t even handle any discrepancy related to the payment or otherwise. So the insurance provider has to be contacted in this case.

Another negative aspect is inadequate cover in the free products. It is recommended that an individual must have life insurance cover 100 times than his/her income and a personal cover ranging between Rs. 50 Lakh to Rs. 1 Crore. Also, as advised, one should have a medical insurance plan with the sum insured with a base cover of Rs. 5 Lakh and top-up/super top-up of Rs. 10 Lakh to cover expenses in the current times.

As per the significant health risks these days, the free plans offered do not offer adequate cover to the policyholders. Which means that these products offer no real good to the people. They are just using the tried and tested way of luring people by offering them something which is free.