Does your company take care of your health insurance needs? Here's why you need a separate plan

A few months back, Rajat Maheshwari was working as a manager at a big corporate firm, and was well-insured by his employer. When the COVID-19 pandemic broke out, the firm incurred huge losses and decided to lay off people. Rajat lost his job, and along with that, the insurance cover that his company provided. Now, at the height of the coronavirus outbreak, Rajat didn’t have a steady source of income and he also had no insurance that could shield his savings in case any of his family members got infected. So, if you are someone like Rajat, who is banking on the employer's health insurance plans, you need to rethink the situation. Let’s discuss why it may not be the best insurance policy for you.

Reasons why you should not rely on employer health insurance

An employer-provided health insurance policy, also referred to as group insurance plan, generally covers all the employees in the organization. Here are some reasons why it may fall short when needed the most.

1. Validity
As you must have guessed from Rajat’s predicament, once you leave a company, you will no longer be covered by their health insurance policy. So, let’s say even if you were moving from one company to another and both employers offer insurance as part of the salary package, you and your family will still not be covered during the period between the two jobs. Any instance of a medical emergency during this period can hit your savings hard. Now, imagine if you suddenly lose your job or learn that your new company does not offer health insurance to its employees. Pretty worrying, isn't it?
2. Termination of the policy
As a policyholder, you would always want to be in control of when to end the contract. But in the case of employer health insurance cover, it becomes invalid if the firm fails to pay the premium or if the insurance company terminates the agreement. You have no say in it.
3. Sum insured
While some companies give the option to increase the sum insured, most offer a standard plan with a low sum insured. The cost of quality healthcare is rising and in case of critical illness or extended treatment, such policies quickly reach the threshold figure, and the additional charges are paid by the policyholder.
4. Scope of coverage
Many policies provided by companies exclude elderly parents from the number of members the policyholder can add to the policy. Also, there could be other exclusions in the form of not covering pre- and post-illness costs, applying co-payment and room rent capping clauses, etc., which the policyholder will then have to bear. A standard health insurance plan provides only basic coverage.
5. Renewability
You need health insurance even after retirement. So, when you have an individual policy, you get features like lifetime renewal, something you can’t get in an employer’s health insurance. The renewability feature plays a crucial role especially during the later years of your life.
6.Waiting period
Now, let’s assume that you plan to buy an individual plan after leaving your job. Well, every new insurance policy comes with a waiting period of a few months. So, for those months, you will enjoy no coverage despite having bought a plan. Similarly, if you wait till retirement, you must know that medical insurance for senior citizens is quite costly and requires several medical tests, considering their limited source of income and vulnerability to critical illnesses.

 

So, what should be done?

The above-mentioned list should help you understand the importance of buying a separate health insurance plan. Since you would be interacting directly with the insurer here, you can pick a plan that provides wide coverage at a pocket-friendly premium. You can also choose an insurer that offers a high claim settlement ratio. In fact, you can use the employer health insurance to pay for minor treatments and keep your separate plan claim-free. This way, you can leverage the claim-free period to get more discounts or a better offer from the insurer while renewing the plan.

 

Conclusion

Employer health policies do have certain benefits, such as covering an employee irrespective of their age or any past medical history. You don’t have to pay anything for the medical insurance provided by your company, but if taken individually, you will have to pay the premium. However, company-provided blanket plans cannot cover individual needs. So, it is wise to opt for the best health insurance in India , based on your need and budget, to save the day when your employer’s policy can’t.

 

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