Are you relying only on your Corporate Health Insurance?
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A good portion of corporate companies operating in India offer Corporate or Group Health Insurance as a benefit along with salary. There is nothing wrong with going for these plans. What IS wrong, though, is relying solely on these plans for your Health Insurance needs.
We will now delve into the reasons why a separate Health Insurance for yourself as well as your family is crucial, owned and paid for by you and no one else.
The total cover offered is often insufficient
With the constant rise in hospitalization costs, not to mention the heavy financial burden if a family member contracts COVID-19,?it has become a necessity to have health coverage of minimum ? 5 lakhs for an average male of 30 years?earning 10 lakhs per annum?who wants to?insure?his family.
In most cases, though, the total coverage offered in corporate health insurance is not more than Rs 2 to 3 lakhs,?and you may end up with a health cover that is insufficient to fulfill your needs.
Your employment status is a factor for coverage
One of the major drawbacks of corporate health insurance plans is that it will cover only if you are an employee of the company.?The moment you leave the job,?your health insurance plan will also leave you. If?you do not have an independent cover during the period of unemployment,?you and your family is at risk of being uninsured. Moreover, you will not be sure whether the new company will provide you with health cover or not. Also note that buying a health plan later in life is much?costlier.
Problems in getting post-retirement coverage at low cost
Individuals who are covered under a corporate health insurance plan will cease to be covered after retirement. In this case,?the?absence of an?independent health plan will?force?you?to?get insured at very high costs. Not only that, you will be subjected to a series of medical tests?to check your eligibility to be insured in the first place. Also, don’t forget that most senior citizen policies don’t offer coverage for pre-existing diseases after a certain age.
Tax?benefits cannot be availed on corporate health insurance
On buying an independent health plan,?you can?avail tax benefits up to???20,280?under?Section 80(D). Moreover, the maximum?investment declaration?of?? 65,000?can be made under this Section, because the Section allows taxpayers to claim deductions for health insurance premiums paid for insuring self, spouse, dependent children,?and parents.?These tax benefits cannot be availed on corporate health insurance.
Corporate health insurance offers?restricted customization options
Generally, when you buy an independent health plan,?you have the flexibility to customize your plan as per your needs.?As per your needs, you can choose Critical Illness clauses, insertions, features,?and?riders. But this is not the case with corporate health plans. The features you might be looking for will not be there because, in most cases, the employer negotiates the plan with the insurer and chooses the most cost-effective plan.
Who is ultimately benefitting??
Employers and companies?generally?look out for cost minimization?by providing minimum coverage health insurance policies to their employees. Additionally, these plans come with?co-payment?and?room?rent limit?clauses to keep your employer under low accountability. This is one of the major reasons why corporate health plans are not the solution to your real-world needs.?We don’t have to mention separately how medical costs have almost touched the sky in India, with no signs of slowing down.
Looking at the limitations of corporate health insurance plans,?it is important for you to have an independent health plan that financially?supports you and your family at the time of health emergencies.
Prakash was feeling a bit relieved as the company he works with provides him a health insurance cover of ? 5 lakhs. The policy also covers his spouse and dependent parents. For 3 years he has been working in the same organization, and never came a situation when he had to claim his corporate health insurance policy.??
But in the fourth year, his mother started developing some kidney problems. She was taken to the hospital where she underwent some medical tests. The tests revealed that she needs to undergo a kidney transplant and dialysis, as her left kidney had failed to function.?
It came as a setback to him as his employer insurance policy had a coverage limit of ? 5 lakh and the total expense came out to be much more than that. So, he had to pay a huge amount from his pocket, which he could have saved if he had a separate health insurance cover with an adequate sum insured amount in addition to his corporate health plan.
Unfortunately, it is a common scenario these days. Most of the people do not buy health insurance as they rely too much on their employer’s health insurance coverage.
The question is can one afford to miss out on health insurance especially with the healthcare inflation rising at an alarming rate?
To arrive at an answer we will try to approach it from all the possible angles. It will help you in zeroing down on the best medical insurance for yourself and your family. After all, why should you settle for anything less?? So, without wasting much time, let us dig into it a little deeper:
How Does Corporate Health Insurance Work?
In simple terms, it is a type of health insurance policy that the employer provides to its employees. It offers them the optimum health cover they require:
Breaking Down Further
Since corporate health insurance comes as a part of our employment contract, we rarely try to compare its pros and cons with other plans. Never putting in the due diligence to what we are missing out on.
More often than not, employer health plans come with a lot of clauses and caveats that are not there in an individual or a family floater health plan. So how would you ensure that you are well covered?
Let’s compare the pros and cons before we come down to a conclusion.
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The Pros of a Corporate Health Plan
Waiting Period
Waiver of the waiting period is one of the biggest advantages that it offers. Usually, a waiting period of 2 to 4 years applies to pre-existing illnesses, certain specified medical conditions, and maternity benefits. In this case, the employee gets coverage right from the inception of the policy.
Pre-Existing Diseases
When it comes to corporate health plans, most of the claims are accepted despite any pre-existing illnesses (that you might have before getting insured). It is another advantage, as many insurers may deny claim or coverage or will have a waiting period clause in such cases. You can always check with your employer to be sure.
?No-Medical Checkup
The policy is issued without undergoing a pre-medical screening, even for senior citizens. In other health plans, a pre-medical test may be required depending on your age, and pre-existing medical conditions.??
?Premium is Taken Care Off
The premium is paid by your employer. Only if you plan to increase the sum assured or top it up with another health plan, you would need to pay the difference.
The Cons of a Corporate Health Plan
To help you make an informed decision, we have outlined why a corporate health plan may not suffice, and why you may need to enhance it with an additional cover?
Coverage Amount
Group medical plans that are taken by most of the employers have a limited sum assured amount. The maximum coverage could likely be up to Rs. 5,00,000 (if you are lucky).
And if we look at the cost of medical treatment in case of a serious illness, this amount would only make up for 25 to 35 percent of the total expenditure. So, why pay from your own pocket if you have an insurance cover?
Co-Payment Clause
It implies that a fixed percentage of the medical bill needs to be paid by the policyholder. In this case, the insurance company will only pay a percentage of the sum insured amount. For example, the insurer will pay 80% of the total expenses, and you need to shell out the 20% from your bank account, and in some cases, it can be as high as 40%.
Most insurance policies do not have a co-pay clause, unless it is for a senior citizen, and also give you the liberty to opt-out of it (if there is any). You can always select an individual health plan without a co-pay or minimum co-pay.
Room Rent Capping
It is also referred to as a sub-limit on hospital room rent. So, in a corporate health plan, the permissible room rent limit is pre-defined. And if you opt for a room with a higher tariff, then you will need to foot the difference.?
?Policy Tenure
Your corporate health insurance will offer coverage until you are employed with the organization. The moment your employment ends, the policy will get terminated. You will be out of insurance cover, till you get employed somewhere else.
?Number of Insured Members
Not all the employer health insurance plans offer coverage to your dependent family members. It is one of the major shortcomings of this plan. The whole idea of buying a health cover is to secure your loved ones along with you in case of a hospitalization. And if you have your spouse, children, and elderly parents’ dependent on you, then corporate health plans might not be adequate.
Conclusion
Corporate health insurance has some advantages like zero waiting periods, reduced premium cost, no pre-medical screening, but the amount offered is not sufficient to meet the entire cost of hospitalization in India.
If you truly want to plan for your future, it will be prudent to treat your corporate insurance policy as a secondary option, along with a separate health insurance plan that offers extensive coverage as per your medical requirements.
Thinking of buying one now? Well, click here and head to?Finvest India?to get personalised quotes from top insurance companies?instantly.
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