ICICI Bank Introduced an FD scheme with Free Insurance. Is it Good?

Recently ICICI Bank has launched a new scheme of Fixed Deposit of FD health. As per this scheme you would get the double advantage of a Fixed deposit and a Health insurance which will be of Rs. 1 Lakh.

“This offering is a first in the industry and provides advantage of safety and growth of a fixed deposit along with protection of critical illness cover which will provide financial help, if needed.  It comes with a complimentary insurance covering 33 critical illnesses for a period of one year for sum insured of Rs 1 lakh to the FD holder,” says Pranav Mishra, Head – Retail Liabilities, ICICI Bank.

Usually, in case of emergency, people have to cash out their fixed deposits first if the medical expenses are not covered under the health policy, or in case of any specific disease too, expenses are not enough to cover them.

In such cases, it is profitable to have a stable equity return and high fluctuations at the same time. As these days, it has been seen that investors are now moving back for the stable returns. “FDs have been a fundamental investment option for most individuals irrespective of their risk appetite. With the prevailing volatility in financial markets, we see renewed interest by customers to invest in FDs as they offer a combination of attractive interest rates, liquidity, safety of capital and assured returns,”says Mishra.

How This cover works

FD Health scheme provides you a cover of total Rs. 1 Lakh for critical illness insurance. There are 33 types of critical illness which are covered in this policy. If you got ay of this listed disease, you would be eligible to claim the insurance cover without withdrawing your fixed deposit.  “With the unique dual proposition offered by FD Health, one can stay covered against medical expenses without having to break one’s savings,” says Sanjeev Mantri, Executive Director, ICICI Lombard General Insurance.

The critical illnesses that are covered under the policy include specified severities related to cancer, lung disease, kidney failure, liver disease and benign brain tumor, Alzheimer’s disease and Parkinson’s disease.

Eligibility criteria

The bank offers this FD health insurance on opening of the Fixed deposit of Rs. 20 Lakh to 3 lakh, for minimum two years. This insurance will have illness cover of Rs 1 lakh from ICICI Lombard General Insurance Company. This option is available to only those depositors who are in the age bracket of 18 years to 50 years.

Should you go for it?

The Insurance cover of Rs. 1 lakh is too low for any serious illness. Thus, if you are taking this policy, you should not get depended on it wholly. You should get a separate insurance for this too. Other thing is that the free cover it provides is available only for 1 year, so you would need to pay premium and renew it on your own if wish to renew it.