We are getting the insurance cover from my Credit card at a heavy discount then why I should go directly to Insurance Co.?

The product offered under credit card scheme has different risks covered also carries administrator cost at rate of Rs. 175 to Rs. 250 per person.So for a family of four it adds up to approximately Rs. 1000.

The analysis reveals that going for the policy from the Insurance company is more beneficial in the long run as cost in Rs/Lakhs in the fourth year at Rs.807 is lower for Royal Sundaram insurance rather than buying the same through S.B.I. card.

Let us go into an in depth study;

In September 2004, the following study was made on the basis of leaflet being circulated by S.B.I. card to its card holders.

Sum Assured Is Rs. 1,00,000 for each member
Name Age As per SBI Card Royal Sundaram Premium for Royal Sundaram (Rupees) Premium for Cholamandalam
Mr. Lall 42 1230 1485 1560
Alka 36 1230 1485 1560
Suman 6 1200 934 1208
3660 3904 4328
Discount 915 390 433
Administration on Fee175 * 3 525 0 0
Total 3270 3514 3895
Benefit No Claim No Claim No Claim
Bonus is 5% Bonus is 15% Bonus is 10%
After 3 yrs 115000/- 145000/- 130000/-
Sum Assured Per Person Per Person Per Person
Cost Rs. /Lakh 947 807 998

Generally people switch over the credit card in 2 years time depending on the:

  • Cost/Year
  • Service not being satisfactory
  • Attractive incentive offer being made

You may not like to stick to a credit card for a long time only because health Insurance was purchased through credit card. If you are not the credit card holder then you can not be a member of the group so you can not be-covered under the policy. You Will not receive renewal notice also and changes are you will be uninsured.

What emerges out is that

Read the details in any such offer carefully and then only decide. Do not be impressed with 40% discount offer as it is shown in this leaflet.