For those who are covered under a corporate health insurance policy, often contemplate whether they should buy a personal health plan. This is quite a valid question. First because company health plans offer certain benefits that personal health policies do not. Second, if my family and I are already covered under a health policy, why should I increase my expenses by purchasing a second one?
In this blog, we will discuss the pros and cons of being covered only by a group health insurance plan as against having a personal health plan along with the group health insurance. The comparison between the two options will help you decide which would be more beneficial for you.
But let’s first understand what a group health policy is.
A group health insurance plan is a compensation benefit that your company provides you. It pays for any medical expenses incurred by you and your family during the tenure you work for the company. Most features of a corporate health plan are similar to a personal health policy. Plus, there are few added advantages that you enjoy for being covered by a group health plan. Here they are:
Number 1: Employees do not have to pay premium:
For a group health insurance plan, you, as an employee, don’t have to pay any premium. It is paid by the company. This means you get health insurance for free.
Number 2: Covers the employee and his/her family:
Group health insurance not only covers you but in most cases provides coverage to your spouse, children, and sometimes even parents.
Number 3: No waiting period:
The waiting period for hospitalization is waived off in case of most group plans. That is, your health cover starts from the day it is allotted to you.
Number 4: No medical check-up needed for enrolling:
There are no medical tests before enrolling in a group health insurance plan.
Number 5: Pre-existing illnesses are covered:
Group health insurance plans generally cover pre-existing illness from day 1, which is by far the biggest gain from these plans.
These are five reasons to argue that if you are covered by a corporate policy, there is no reason that you need to buy a personal health policy. However, let’s not jump into conclusions just by looking at one side of the coin.
Relying only on corporate health policy – not a smart idea
Though there are certain advantages of being covered by a group health plan, simply relying on it is not a smart idea. Here are the 5 reasons to support it.
Number 1: Health cover is not guaranteed with the job:
The very assumption that all organizations offer health insurance benefits is flawed. According to a 2015 benefit trends survey, only 44 percent of Indian companies offer group health cover as an employee benefit. This means, if you were to move to one of those 56 percent companies which don’t offer group health insurance then you can face some massive financial stress during a medical emergency.
Number 2: Coverage amount can be reduced:
If a company is going through financial hardship, it might reduce the insurance coverage. For this, it might exclude your spouse, parents, and children from the policy.
It might shrink the policy coverage. Also, the company might ask the employees to co-pay some part of the premium.
Number 3: Coverage is not always enough:
Most group health insurance plans provide coverage of Rs 2 to 3 lakh. But looking at the rising health inflation, the proportion of health insurance coverage should be at least 6 times of your monthly salary. So, for someone earning Rs 80,000 per month as salary, a Rs 2 lakh health insurance cover will be quite a case of under-insurance. The difference between the requirement and the actual needs can be bridged with a personal health insurance plan.
Number 4: No coverage after retirement:
Finally, a corporate health insurance plan will almost never last beyond your retirement even if you were covered through these plans throughout your working life.
Now, to start a health plan at the age of 60 is never a good idea because in addition to the struggles of finding an insurer who will accept your case, you have to deal with waiting periods, exclusions on any pre-existing illnesses you might have and heavy sub-limits on certain procedures.
So, what should I do?
A very effective strategy employed by many Indians is to have both plans – the corporate plan and the individual plan. This way you have an added cushion in case your medical emergency goes over the corporate plan limits along with an abundance of advantages like higher benefits, no claim bonus, lifelong renewability, and tax benefits.
Bottom line:
Though corporate plans come with certain benefits, they have their constraints too. So the best thing to do is buy personal health insurance along with it. This ensures you and your family are protected from health emergencies, no matter what.
And now that you know why having personal health insurance is a good idea, you can simply head to ETMONEY and buy a health insurance policy from top insurance providers in a paperless manner.
