Employees working in almost all reputed organisations take corporate sponsored group health insurance for granted. So much so, that if you are working in a large corporation, the inherent assumption is that you do not need to maintain a separate personal health insurance plan. This approach needs to be revisited for several reasons.
Corporate covers offer low sums assured
A significant proportion of the group health insurance plans offer a sum assured (SA) of around Rs 2-4 lakh. Hospitalisation costs have been on the rise for some time, and so the SA in group plans can be inadequate at times. Treatment for critical illnesses can cost upwards of Rs 20-30 lakh. Even for COVID-19, a large number of people had to pay hospitalisation bills of over Rs 10 lakh. A personal health insurance plan helps to meet such eventualities.
Exhaust waiting period
A personal health insurance plan has a long waiting period ranging from one to four years. During this period, the specified exclusions and pre-existing ailment are not covered. If you buy an individual plan, while still being covered by your employer, then you would have some active coverage as the waiting period lapses.
Accumulate No-Claim Bonus
Personal health insurance plans offer No Claim Bonus in the range of 10-50 percent. This is a very cost-effective way of enhancing your sum assured. While you are covered in the group policy, small claims can be filed there. This would help you accumulate No Claim Bonus and increase your effective coverage under the personal health plan.
Chances of non-issuance later
Some insurers are reluctant to issue personal plans if you are diagnosed with a chronic condition or have undergone a major surgery in the past. In some cases, the insurer may exclude such conditions permanently or deny issuing a policy at all. Though rare, such cases are rising. The type of chronic conditions that trigger caution includes diabetes, spinal issues, and kidney stones. It helps to get a personal health insurance early, as the individual product is lifelong and renewable, irrespective of claims made.
Restrictions in group health insurance policies
Some employers may have put restrictions in a group plan to manage costs. The restrictions could be on the room rent eligibility, or co-payment, or disease-wise capping. In such a case, the employee may have to pay a portion of the claim out of his own pocket. If you have a personal health insurance plan, then you can claim without being subject to such restrictions.
A group plan is an excellent source of coverage for employees. It helps employers help employees in case of medical exigencies. Several employers work with their advisors to differentiate their health coverage and make it more comprehensive for employees.
To conclude, employees should not rely only on one source of coverage. Considering the rising incidence of health issues and increased cost of hospitalisation, it is important for employees to have a second line of coverage.(The author is Principal Officer and Managing Director of SecureNow.in)