Bundling health and life insurance plans is a popular choice among consumers. As insurance companies offer plans combining both life and health insurance into a single policy, potential policyholders are weighing the benefits and drawbacks of such arrangements.
Bundled policies reduce cost structures for insurers, said Atri Chakroborty, Chief operating officer at IndiaFirst Life Insurance.
“Given the rapid increase in medical costs, it is becoming increasingly important for individuals to consider comprehensive health insurance as a distinct and essential component of their financial planning. Combo plans of health and life insurance can offer convenience. However, a standalone health cover offers options of choosing higher coverage, specialised benefits and features among other flexibilities to adjust your coverage as per your individual health care needs,” said Ajay Shah, Head – Distribution, Care Health Insurance.
Advantages of bundled plans
Convenience: Bundled plans allow policyholders to manage their health and life insurance coverage under a single policy, reducing paperwork and simplifying premium payments.
Cost savings: Some insurers offer discounts on bundled products, which can result in lower overall premiums compared to purchasing separate policies.
Easier claims process: In some cases, having a single point of contact for both health and life insurance claims can streamline the process for policyholders or their beneficiaries.
Disadvantage of bundled plan
Lack of flexibility: Bundled plans may not offer the same level of customisation as separate policies, potentially leaving gaps in coverage or providing unnecessary features. (Means what?)
Difficulty in comparing plans: Bundled products are complex, making it challenging for consumers to compare different options and ensure they are getting the best value for their money.
Potential for underinsurance: The life insurance component in bundled plans may not always provide sufficient coverage, especially for those with higher income or significant financial responsibilities.
Limited options for switching: If a policyholder becomes dissatisfied with one aspect of the bundled plan, they may need to cancel the entire policy, potentially losing both health and life coverage.
“Bundled products provide opportunities for companies to be more innovative and provide more comprehensive and easily accessible solutions. Bundled products are more operationally efficient in terms of managing renewal payments and customer communication. Ultimately, it’s all about making the process easier and more efficient for our clients. It’s definitely a smart choice for consumers,” said Casparus Kromhout, managing director and chief executive officer at Shriram Life Insurance.
Points to keep in mind while taking bundled plan
Carefully review the coverage details and limitations of both the health and life components.
Compare the bundled plan with standalone health and life insurance policies to ensure you’re getting adequate coverage in both areas.
Consider your long-term insurance needs and whether a bundled plan will continue to meet those needs as your circumstances change.
Seek advice from independent financial advisors if you face any difficulty.
First Published: Aug 28 2024 | 12:11 PM IST
