Is Corporate Health Insurance Enough?

A good health insurance policy for you and your family is the cornerstone of a solid financial foundation that you must set up if you want a secure future. If you’re employed by an organization or a firm, you’re most likely receiving health coverage from them in the form of a group health insurance policy.A group health insurance policy is a policy designed for a large number of people, which is usually bought by employers for their employees. Such a policy is generally customized to suit groups of people instead of being tailor-made for individuals. So, the big question arises, is such a policy enough? Or do you need to buy a separate policy for you and your family?Let us dive headfirst into the specifics of this question and find out exactly why a group insurance policy may not be sufficient for robust health coverage and why a separate health policy should be the way to go

A group insurance provided your employer will only be active as long as you’re employed with the company. It will be terminated as soon as you leave your job. This makes it risky to completely rely on it for your health coverage. And on top of it if your group policy covered your family too, then they will also be out of health coverage.Going for a new independent policy after you lose your job will also mean that the waiting period will be applicable, which will mean that despite having a policy you will be unable to claim it. Therefore, it is always wise to have a separate health insurance policy right from the start, keeping your corporate coverage as a backup.

A corporate health insurance usually has a low insured sum that may not be entirely sufficient when you have to undergo medical treatment. There is little change of the sum insured being increased even in the case of an old employee. This makes a separate a must so that you can enjoy the benefits of a higher insured sum.

Group policies usually have a copayment clause, which means that the insurer will cover only a part of the treatment expenses. The copay percentage specified in the terms will have to be paid by the policyholder. An independent policy scores over a group policy yet again, because most of them do not have any such clauses, and the entire treatment cost can be claimed from the insurer.

Health coverage for the family is not the norm when it comes to group policies provided by your employer. In fact, very few group policies include the policyholder’s family in it. A family floater plan, on the other hand, is a single policy that provides health coverage to you, your spouse, your children as well as your parents. And this makes it a much better option than a group policy. Many providers also include riders that allow you to include your grandparents as well.

The continuation and terms and conditions of a company provided group policy is entirely in your employer’s control. This means that your employer can terminate the group policy and change its terms without any legal consequences to save costs. Companies are not required to mandatorily keep your policy active. If they, for any reason, stop paying premiums, your health coverage will cease to exist.

An independent health insurance policy allows you to deduct taxes under section 80D for the premiums paid. A group policy does not feature any such benefit.

Therefore, it is very evident that one cannot wholly rely on an employer’s insurance when it comes to the health of themselves and their family. An employer insurance can be a good backup policy but for sufficient and extensive coverage with a significant insured sum, an independent health insurance policy or a family floater plan is the way to go.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.