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Be double insured with a corporate and individual Health Insurance

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Published on January 24, 2021 | Est Read Time: 3 min

If you work in a reputed organization then you are already privileged with a group health insurance. You feel it’s sufficient to cover the cost of a medical emergency for you and your spouse. If you wish to add your parents and children to the plan it comes with an additional cost but it is possible. We all like freebies and group health insurance is like the cherry on top as you get security and stability as the organization pays for the premium. 

Indians are learning the hard way that holding one insurance policy linked to your job may not be enough. There are many reasons to have independent health insurance to supplement your employer-sponsored coverage, but the main one is that most corporate plans simply don’t offer a high sum insured. They protect their money using the fine print in their offer document and payout what they promised only once they have no more fine print to hide behind. Companies and employers, too, seek to minimize costs, by providing bare-minimum coverage insurance policies to their employees. Policies that include co-pay clauses, for example, are usually cheaper, and more attractive to companies who focus on the bottom line of the P & L account, rather than their employee’s wellbeing. Even a bare minimum insurance policy can still be used as an “insurance benefit” to lure or retain employees.

Here are some reasons why group health insurance isn’t sufficient:

1. Insufficient sum insured

People are living longer and the relentless rise in medical inflation coupled with the burden created on the healthcare infrastructure by the pandemic has given rise to a situation where one medical emergency can become a major financial setback. This has increased the need for high health insurance coverage and, sadly, most corporate insurance plans do not provide that. In group health plans, one cannot change the coverage amount depending upon personal requirements. 

2. Loss of job

You can reap the benefits of employee health insurance until you are a part of the organization. Once you switch your job or lose the job your health insurance also ends. In case of a job switch with a gap in between, the person will be unprotected. Also, there is no guarantee that the next employer will necessarily have a group employer-provided health insurance plan for employees. Having an individual will cover you despite your employment status.

3. Post-retirement coverage

Everyone has to stop working at some point and once your income flow stops preparing yourself for medical expenses is important. Getting your first insurance policy after you retire will be an expensive affair - maybe even an impossible one if insurers decide you’re too much of a risk.

4. Lack of flexibility

The fact that your entire family may not be covered by corporate policies is an indication that ultimately, it is the employers who negotiate all the aspects of group policies including diseases covered, critical illnesses, the inclusion of dependents, and the sum insured with the insurer. Besides the policy clauses, it is important to remember that the power rests with your employer when it comes to providing continued health insurance coverage.
 
5. Changes in the employee policy

What would you do if for some reason (like cost-cutting, etc.), the employer decides to do away with health insurance or reduce the coverage substantially? You would be left hanging with no health insurance.

How much individual health insurance is required?

Having corporate health insurance is a perk and no changes can be made to it. Hence buying individual health insurance that suits your requirement and is handpicked by you can be useful. The answer to the question of how much health cover is required is anything in the range of Rs 7-10 lacs. Family members can be covered in this policy so you don’t need to buy an individual policy for them. In case of hospitalization use the employee health insurance first and later use the personal policy in case the bill exceeds the coverage. Also, it might seem like a waste of money but try to buy personal health insurance as early as possible. That way, your starting premiums will be low and you will not be denied policy purchase later on

Conclusion: 

It a great initiative by your employer to provide you a corporate health insurance policy. But that doesn’t mean you need individual health insurance to secure yourself and your family from any medical emergencies. Once you own an individual medical plan you can avail tax benefits under section 80 D which isn’t applicable on group health insurance. Not only do non-group health insurance policies offer you a range of coverage amounts, but they also come with additional advantages. Start searching for the best health insurance plan for you and your family.