Medical insurance has become an essential part of modern life due to the rising cost of medical treatment and hospitalisation. Almost all companies in India and across the world now offer medical insurance benefits to their employees. These benefits are usually provided through tie-ups with insurance companies.
For example, Public Sector Banks (PSBs) have partnered with insurers such as New India Assurance Company Limited (NIACL) and others to offer medical coverage to their staff. Similarly, the Government of India provides health benefits to central government employees under the Central Government Health Scheme (CGHS).
Typically, banks provide medical insurance coverage of ₹5 lakh to their employees. However, with the rapid increase in healthcare and hospital expenses, this amount is no longer sufficient. For instance, if an employee or their family member is admitted to a reputed hospital in Delhi, this coverage could be exhausted within a few days.
Below is the present medical insurance provided to Bank Employees
| Staff Cadre | Amount |
|---|---|
| Award staff | Rs. 4.00 lacs |
| Officers upto Scale V | Rs. 5.25 lacs |
| Officers Scale VI & above | Rs. 7.00 lacs |
To address this, banks introduced a Top-Up Health Insurance Scheme, where employees receive ₹5 lakh of basic medical insurance free of cost and have the option to purchase an additional ₹4 lakh of coverage by paying a premium. Initially, the top-up premium was quite affordable—around ₹2,500 in FY 2020–21, gradually rising to ₹5,500 in FY 2021–22, ₹7,000 in FY 2022–23, ₹9,500 in FY 2023–24, and ₹12,600 in FY 2024–25. However, for FY 2025–26, the premium for the same ₹4 lakh top-up has surged to ₹17,700, which is a significant increase. This steep rise has raised concerns among employees, as similar coverage is available at much lower prices in the open market.
| Financial Year | Top-Up Premium (₹) |
|---|---|
| FY 2020–21 | 2,500 |
| FY 2021–22 | 5,500 |
| FY 2022–23 | 7,000 |
| FY 2023–24 | 9,500 |
| FY 2024–25 | 12,600 |
| FY 2025–26 | 17,700 |
For example:
- Care Health Insurance offers ₹10 lakh coverage with unlimited restoration benefits for just ₹1,027 per month.
- Star Health Insurance provides ₹10 lakh coverage with unlimited restoration for only ₹527 per month.
This comparison highlights the growing disparity between the premiums charged under the bank’s top-up scheme and those available through private insurance providers.
Many bank employees are expressing frustration over the sharp increase in their medical insurance premium. They point out that private companies are offering much better health insurance plans at much lower costs, while banks are now charging a steep ₹17,700 for just a ₹4 lakh top-up cover. Employees say this is not worth the amount being spent, as they could easily buy a comprehensive health insurance policy from another insurer with more benefits and flexibility.
Some employees even believe that this could be a step towards gradually removing medical insurance benefits for bank staff. They feel that by increasing the premium year after year, banks may be trying to make the scheme unaffordable so that it can be phased out completely in the future.
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