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The dos and don’ts of buying insurance through credit cards

The dos and don’ts of buying insurance through credit cards
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First Published: Mon, May 14 2007. 12 46 AM IST
Updated: Mon, May 14 2007. 12 46 AM IST
You often get calls from your bank, offering health-insurance cover through your credit card, and that too without any identification or medical proof (which you have already provided the bank while applying for a credit card). It may seem worthwhile to opt for a health-insurance scheme through a credit card, which saves you the hassle of paying in cash.
But before buying any of these policies, remember there are no free lunches and health-insurance companies may charge you extra. The 10 questions featured in the main story can be your best guide to deciding which policy to opt for, but there are a few more things you need to check before buying a health-insurance policy through a credit card.
What is the administrative cost?
The administrative costs for these policies can range from Rs175-250 per family member annually. So, if there are four members in your family, you may have to pay anything between Rs 700 and Rs 1,000.
With which office of the insurance company will you deal ?
Find out with which branch of the insurance company you will deal. You will incur higher courier and phone charges if the insurance office is located outside the city in which you live. It is always better to deal with a company located in your city.
What are the features?
Generally, no no-claim bonus is given for these policies, but if given, these can be lower than the existing market rates. Find out all the features your credit card policy is going to offer you. The company may not offer you a floater family option.
What if you want to surrender your credit card?
If, at any time, you want to give up the credit card, because of high annual charges, unsatisfactory service or any other reason, the insurance company will terminate your policy immediately. You may have to pay a high price if this happens. It will be especially difficult if this happens when you are older, as at that point, it’s difficult to get a policy.
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First Published: Mon, May 14 2007. 12 46 AM IST
More Topics: Business of Life | Health |