ICICI Bank introduces an FD with free health insurance; should you go for it?
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ICICI Bank introduces an FD with free health insurance; should you go for it?

FD Health gives you a critical illness insurance cover of Rs 1 lakh against 33 types of critical illnesses covered under the policy

  • October 14, 2019  
  • |  
  • UPDATED   17:45 IST
ICICI Bank introduces an FD with free health insurance; should you go for it?
The bank offers the complimentary critical illness cover of Rs 1 lakh from ICICI Lombard General Insurance Company on opening an FD of Rs 2 lakh to Rs 3 lakh for tenure of at least two years

ICICI Bank on Monday launched a new fixed deposit (FD) scheme FD Health that will offer the dual benefit of an FD along with free critical illness coverage with a sum assured 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.

In case of a medical emergency, one's personal savings (mostly fixed deposits) are first liquidated if the person is not covered with health insurance or the health cover is inadequate or the specific disease is not covered under the health policy.

Therefore, having an additional protection without any cost looks promising at a time when many investors have seen subdued equity returns and high fluctuations in the same. Many such investors are turning back to fixed deposits for stable return. "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 the cover works

FD Health gives you a critical illness insurance cover of Rs 1 lakh against 33 types of critical illnesses covered under the policy. If you are diagnosed with one of the listed critical illnesses, you will be eligible to make claim without liquidating the 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 the complimentary critical illness cover of Rs 1 lakh from ICICI Lombard General Insurance Company on opening an FD of Rs 2 lakh to Rs 3 lakh for tenure of at least two years. 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 cover of Rs 1 lakh is low considering serious illnesses covered under the policy. Therefore, you should not solely depend on this policy for your critical illness cover and must go for a separate insurance with higher cover. Another catch is that this free cover is valid only for the first year. If you wish to continue the cover, you will have to renew it on your own and will have to pay premium on that. However, as you are getting this policy for free with the fixed deposit, there is no harm on having an add-on cover without paying any cost.

The interest rate offered by the ICICI Bank on FDs with premature withdrawal option for amount below Rs 2 crore is currently 7 per cent for a tenure of two years and its 6.9 per cent for a tenure of more than two-three years. The interest rate offered by the bank is competitive among large banks. Go for this FD based on your financial planning and asset allocation requirement, not because of an additional feature.

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