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Why corporate health cover is not sufficient to secure your family’s health

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Ajay is a 45-year old engineer working in an MNC in Delhi. His family includes his father, son, and wife.

On one beautiful evening, he was sitting with his best friend Neeraj in a restaurant when suddenly their discussion moved towards high prices of fuel and other household items. Neeraj said, “My half salary goes into household expenses. I want to buy a luxury watch for myself, but I don’t think it will be feasible. The inflation is so high that most of the time I avoid visiting my doctor who charges very high fees.” Suddenly, Ajay asked, “Are you not covered under your corporate health insurance?” He further added, my corporate policy coverage covers my entire family with a sum insured of Rs 2 lakhs, and I don’t need to worry about the well-being of my family.

But is a cover of Rs 2 lakhs sufficient for a family of four, including a senior citizen, or should Ajay revisit his Health Insurance needs?

Clearly, Ajay is underinsured. His corporate health insurance policy is stagnated. Sadly, he doesn’t understand this and continues to believe that he is well-insured on the health front. With the rising age, his father might need frequent medical care. But what if the entire coverage is wiped out on one hospitalization of his father? What about the coverage for his wife and son?

The rising healthcare costs and longevity make it important to have a separate family health insurance coverage.

Underinsurance not only causes stress and results into sudden out of pocket expenses for policyholders during times of medical emergency but also gives them a false sense of being covered.Although there is a slight rise in the number of health insurance policyholders in India, most often people go for the lowest sum insured cover. Underinsurance is as bad as no insurance. As per the survey conducted by BigDecisions.com, 95% of middle-class Indians do not have sufficient insurance to cover some of the common ailments. The extent of underinsurance is greater in the 45-plus age group, which is the high-risk group.

Many people like Ajay deny the idea of buying a separate health insurance policy as they believe that their corporate policy is sufficient. To break the myths of such people, here are some quick facts:

Corporate insurance is not available if you leave the job

In most of the cases, employer health cover is not available after retirement

According to the survey conducted by a leading insurer a few years ago, most companies are planning to cut perks given to employees. If your company also decides to cut corporate health insurance benefit, it can pose serious risks to you

Though corporate health policies cover dependents, it is not sufficient to deal with high medical costs

Many workplace insurance plans have clauses like deductible and copayment which mean that you would have to pay a certain amount in case of a claim

Further, the sum insured available under corporate health insurance policy is between Rs 2 lakhs and Rs 5 lakhs, which is not sufficient to beat the medical inflation which is rising at an unprecedented rate. The healthcare inflation is close to 20% as compared to the inflation rate, which is hovering between 8% and 9%.

Source: Livemint.com

Medical inflation is a reality which you can’t ignore. We are not living in a country where healthcare is free, isn’t it? So, the best way is to buy a good Family Health Plan? to fight against rising medical expenses.

Several factors need to be considered before choosing the right individual or family health plan such as pre & post hospitalization expenses, waiting period for pre-existing ailments, expenses & loads, etc. Further, most of the insurance policies come with sub-limits, like there could be a limit of Rs 4 lakhs on a certain type of surgery or Rs 50,000 on medicines. This sub-limit should be considered while buying a health insurance policy.

The other area that one should consider is the hospital network as more the number of network hospitals, the better it is for you. Besides this, always check on terms & conditions like while some policies include doctor’s fees and gives a fixed daily amount during the recovery period, other cover only the hospital expenses; while some might cover traditional treatments like Ayurveda, homeopathy, etc.

Most insurance companies come with the concept of deductible and co-payment, which means you have to bear a portion of the medical expenses before the insurer settles the claim. For instance, if the deductible is 5% and your medical expenditure is Rs 2 lakhs, then you will need to pay Rs 10,000 before the insurer pays the remaining Rs 1,90,000. One should always go with the insurance plan that covers 100% of the expenses or comes with a minimum sublimit, even if it means paying higher premiums.

Then there is a ‘pre-existing condition’ clause, wherein any ailment or illness that one already has, may or may not be covered. Then, the renewal age is another factor that should be considered. It is important to choose a policy that comes with a lifetime renewability option.

Though, taking a family health plan, which as the name implies, covers the entire family in a single policy, is advisable, you should go for individual health plans for your senior citizen parents.If the family includes husband and wife only, it is good to go for a family floater health plan as the policyoffers high coverage.

Hospitalization plays an imperative role in the well-being of the family members from newborns to elderly. Therefore, it is necessary that you review your health insurance portfolio at least once in every three years orin the case of any change in the family’s situation.

As in the case of Ajay, he should immediately buy a separate senior citizen health insurance plan for his father or go for a comprehensive Family Health Plan to cover his entire family. After all, it is a matter of the family’s health, and one can’t take any risk with it.