Should you rely on insurance provided by your employer?

Saroj SatapathyIdeal InsuranceThe insurance advantage made available by the employer is termed as the employee benefit plan, abbreviated to EB program. The EB program includes policies for mediclaim, personal accident and group term life policy. It should be noted that all these policies can be bought by individuals for himself. Such benefits are made available by the employer not only as a social security measure but also as an employee retention tool.Although, the insurance from the employer may sound like a good option, but it is not a recommended choice when one talks about an individual’s insurance needs on a larger platform. Employer insurance no doubt is beneficial as it needs no medical examination as an underwriting prerequisite in most cases and more often than not most employees qualify for insurance cover. So even if an individual has an ailing condition he/she can be covered under the insurance provided by the employer and actually benefits from the same vis-à-vis a cover offered on individual platform.Following can be reasons enough to seek a cover outside your organization: Less cover for dependants: Under certain conditions the employer also provides an option to cover the dependants for instance the individual’s spouse, kids and parents. However, there is always a limit to the amount of cover one can buy for them as the same is limited to rank, positioning of the employee and the outgo of the company.Policy is not portable: It can sometimes be recommended to opt for an option of buying an additional life insurance cover through ones employer at a cheaper rate through group term plan. Nevertheless, this too comes with its clauses. In most of the cases the employer insurance is not portable, that means that in case you are leaving the company you would not be allowed to take the life insurance cover along. The worst would be if the new employer has no such procedure of group insurance cover! Even if the new employer offers the cover the individual is left uncovered during the transition stage – from the date of resignation till the date of joining. This also holds equally good for mediclaim as there is no portability condition.Policy is as per the convenience of the employer: With the policy under one’s company, the individual is bound by the rules and regulations the company chooses for the policy. One does not have the flexibility to choose the plan as per their convenience. There also can be a situation where the insurance company increases the premium rate and due to this increase (or any other reason) the policy is cancelled the next year by the employer. What if the individual needs to avail the insurance plan that very year? He/she is left with no option in such a situation. Not the cheapest solution: Even though one may get all that they look for in the life cover provided by their employer, it may be the case that this cover is not the cheapest for them. When hunted for and after a good advice, an individual can find a cheaper cover for themselves and their family, more so if they have started the policy at an early age. Most of the covers offered by the employer start out cheap as one joins young, but as one ages the policy starts getting exceptionally costly. It may sound frightening that if one applies for an individual health plan at a later age he may be asked to undego lot of medical tests and may actually get a conditional coverage!No cover after retirement: Even if an individual’s company has a sound superannuation plan in place, it may not offer a cover to their employees after he/she retires from the organization. In such situations the individual will not have a fall back insurance cover. Also, to invest in a cover at such a late stage of life will make the premium exceedingly costly. The reasons for not relying on the employer insurance are many; however, the solution is to strike the right balance with insurance cover, so that in an emergency the individual is well protected. An individual needs to be prepared for the worst, keeping EB program as a short term option and an individual policy as a long term backup. One must invest in these three policies: a health insurance policy, personal accident cover as a standalone cover or as a rider with term life cover and a critical illness cover. A good suggestion would be to invest as much as 80% of one’s life insurance cover individually. This should take care of all the worries of an individual. When I mention take care of the worries, I mean that the cover should be able to fund the kid’s education, look after the regular household bills and should provide a good living for their spouse and importantly takes care of any health scare by having a good health insurance plan. A deeper evaluation under the guidance of an expert is definitely what I will suggest for an individual who thinks that employer insurance only can suffice.