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Corporate insurance isn't ideal medical insurance

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Published on May 21, 2021. EST READ TIME: 3 minutes

We all like being safe and secure. But this pandemic has taught us that nothing is permanent; change is constant. Most people working in the corporate sector feel that their group insurance is sufficient to cover all the medical expenses. Honestly, it isn't! Most employees don't even read the policy inclusions and exclusions. Hence, at the time of hospitalisation, they realise that the policy does not cover many expenses, which otherwise comprehensive health insurance does. 

Many corporate insurance policies provide family coverage, but sadly that isn't sufficient at all. Imagine you have coverage of Rs 4 lacs for you and your family, i.e. your spouse and parents in their 60s. Medical expenses in today's time are skyrocketing, and Rs 4 lacs cover for the entire family isn't adequate. During a family hospitalisation, it can burn a hole in the pocket and drain the savings. Also, have you thought you are in the transition phase, and unfortunately, you are hit with a medical emergency? What would happen? Here are more reasons to prove why corporate insurance isn't sufficient. 

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

1. Insufficient sum insured

People live 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 significant 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 organisation. 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. After you retire, getting your first insurance policy 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 corporate policies may not cover your entire family is an indication that ultimately, 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 to provide 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.

6. Limited Room-rent

Another limitation of corporate plans is the limitation on room rent. Some plans offer only room rent up to a certain amount, while others have categories like 6-4 sharing wards. This can sometimes only cover half of the rent if you are looking for a private room. The remainder will have to be borne by the insured individual. Sometimes the room rent limitation goes as far as covering only the room and nothing beyond. In this case, other major expenses, like doctor visits or on-call nurses, are not covered.

7. Unpredictable Changes

Although corporate plans have their share of benefits (which are numerous), one of the major drawbacks is their unpredictability. Your company management or HR can change your insurance plan at any time. This is usually done to cut costs by altering terms with their corporate insurance partner. Although this might benefit your employer, it will most certainly catch you off-guard, especially if you or a family member is undergoing medical treatment.

When life is full of uncertainties, it's wise to have health insurance that can be by your side at the time of emergency. Keep comprehensive medical insurance handy along with your corporate health insurance for any future problems. 

Disclaimer:The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.