Categories: Bank NewsBank Staff

Views: Revised premium for IBA Group Medical Insurance Scheme for Retirees 2018-19

From the UIIC/IBA circular dated 06-10-18, on UIIC Group Health Insurance Policy for Bank Retirees, it could be interpreted as under:

  1. A cover of RS 4 lakh WITHOUT Domiciliary, costs annual premium including GST is Rs 28,792/- to a retiree officer. Whereas for a cover of RS 4 lakh WITH Domiciliary annual premium (including GST) costs him Rs.82, 373/-. It means for a sum assured of Rs 40,000 for DOM, the member requires to pay a premium of Rs.53, 581/-. Further, in this case one has to pay premium of Rs.42373/- for insurance cover of Rs.360000/-. On the other hand, a member who sets aside Rs.40000/- for domiciliary treatment without claiming DOM from insurance company,  saves Rs.13581/- (i.e. 53581-40000) from premium payable and also he also gets higher cover of Rs.400000/- instead of coverage of Rs.360000/- to a person opted for DOM coverage. The situation of award staff retirees is no different in the above case.

Conclusion: It is not a prudent decision to go for an insurance cover with domiciliary under the scheme. 

  1. The base coverage of Rs.4 lakh/ Rs.3 lakh + Super Top up coverage under option 1 is cheaper compare to premium payable for reduced base coverage of Rs.3 lakh and Rs.2 lakh + with same amount of Super Top up coverage under option 2. A base cover of Rs.4 lakh + Super top up of Rs.5 lakh costs Rs.33481/-(Rs.28, 792+5,049=33481/-) to a retiree officer. But, a Base cover of Rs.3 Lakh+ Super Top Up (Rs.5 Lakh) costs Rs.35319/- (i.e. Rs.27, 745+Rs 7,574=Rs.35, 319) to him/her under option 3. It means a retiree officer pays lesser premium of Rs.33481/- for the cover of Rs.9 lakh (4 lakh+ top up 5 lakh) and pays Rs.35319/- for the cover of Rs.8 lakh (3 lakh+ top up 5 lakh). Similarly, an award staff retiree pays premium of Rs.26252/- for 7 lakh and pays Rs.27306/- for a cover of Rs.6 lakh.Conclusion: It is a loss proposition in the event a member opts for super top up coverage of             Rs.5 lakh/4 lakh while reducing the base coverage from Rs.4 lakh/3 lakh to Rs.3lakh/2 lakh respectively.
  1. Under UIIC option 2, an officer may go for reduced basic insurance coverage from earlier coverage of Rs.4 lakh to Rs.3 lakh and an award staff from 3 lakh to 2 lakh. Premium reduced in base coverage is Rs.1047 (Rs.28792-27745) for Rs.3 lakh and Rs.1275 (Rs.21595-20320) for 2 lakh. It means premium reduced is only Rs.1047 and Rs.1275 respectively for officers and award staff for the reduction in coverage.Conclusion:  Depending upon the financial and health condition of self and Spouse one can consider opting for a lesser cover of Rs.3 Lakh/Rs.2 lakh to save the premium. But the difference in premium payable is meager compared to reduction in insurance coverage.
  2. Other points:

(a)The room rent now stands reduced to Rs.4000 per day from the earlier Rs.5000 per day.(b) Because of exorbitant increase in premium on DOM coverage a retiree is prohibited from going for PED Cover (PED=PRE EXISTING DEASEAS) which is much against the spirit of the settlement/Joint Note.

Disclaimer: Opinions expressed here above is author’s personal opinion/interpretation which shall not be construed as a recommendation to anyone.

Related article: Renewal of uiic group health insurance policy for Bank-retirees for-the period 01-11-2018 to 31-10-2019

Surendra Naik

Share
Published by
Surendra Naik

Recent Posts

What is Weighted Marginal Cost of Capital?

The marginal cost of capital (MCC) is the total combined cost of debt, equity, and…

33 minutes ago

Meaning of WACC and factors affecting the WACC

The weighted average cost of capital (WACC) is the average rate that a business pays…

17 hours ago

Regulations on Interest Rate Resets on EMI based personal loans explained

The Reserve Bank of India (RBI) defines a personal loan as a type of unsecured…

18 hours ago

Determining the Proportion:  Preference V/s Equity Shares

A share is a unit of ownership in a company and has an exchangeable value…

1 day ago

Overview: Cost of Debt, Taxation, & Capital Structure

The cost of debt is the interest rate a company pays on its debt, and…

2 days ago

Various Theories/Approaches on Capital Structuring Explained

This article explains the assumptions and key aspects of approaches to capital structuring, including the…

3 days ago