Most salaried people enjoy a Health Insurance cover provided by their employers. However, it is not a good idea to solely rely on a group health policy. There are a number of reasons behind this.
Group insurance plans are great in many ways. They allow your employer to cover a large number of people under an umbrella plan at low costs, limited waiting periods, and fewer restrictions on pre-existing diseases. It’s useful to employees since they receive health coverage at no cost. They, along with immediate family members, are automatically covered from the day they join a company.
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However, a group plan is a one-size-fits-all plan and does not take a nuanced view of your personal healthcare requirements. Such a plan is also limited in several ways. Therefore, it’s advisable that every individual buy a retail health policy to cover themselves and their family members.
Listed below are the top five reasons you need additional insurance coverage over and above your employer-provided group policy.
You Need Continuity
Employer-provided group policies cover only members and their listed family members. The moment the employee exits the group – be it resignation, termination, or retirement – the coverage ceases for him and his family members. Given that employment is rarely certain, especially in private sector jobs, it is advisable to maintain a health policy in an individual capacity. If you were to lose employment for any reason, you would be at risk of incurring the heavy expenses of an unplanned hospitalisation.
Buying Insurance Later Is Expensive
If you have been relying on your employer-provided group cover, you may find it challenging to buy your own health cover later in life. As you grow older, your insurance premium costs will increase exponentially. It is also possible that you may experience a health-related episode that could further complicate the insurance-buying process. The best time to buy a health plan is when you’re young and healthy.
Limited Coverage
This is one of the main concerns with a group plan. Often, the sum assured is low and may not be in tandem with present-day healthcare inflation, where a surgery or prolonged treatment of a disease such as cancer could cost you several lakh rupees. With a group plan, your employer is looking to provide you a basic health cover at optimum premium costs. The more features and benefits a group plan has, the more premium the employer will have to cough up. Therefore a small-sized group cover may not protect you adequately if you get hospitalized or seek treatment for a critical illness. These are best done by an individual health plan tailored to the needs of you and your family.
Credits Could Lapse
A Health Insurance plan is most effective when it is maintained without break for 3-5 years, after which the waiting periods and exclusions would be lifted in a graded manner. Group plans, too, may have these exclusions and waiting periods. The credits towards these would lapse if you exit your group plan. And when you buy a new health plan, the waiting periods would start anew. This could be of terrible inconvenience to you if you are at an advanced age and have health risks.
A group health plan is not a bad tool to have. However, you have no control over the plan, and therefore it is advisable to opt for a secondary individual health plan. This will not only help you plan your insurance coverage, it will also give you a lot of mental peace and support.
Additional Reading: 5 Questions To Ask If You’re Buying Health Insurance
Last but not the least, when you are quitting your job, you have the option of converting your group insurance into an individual or family floater policy with the consent of your employer. If you find your group coverage useful, you can continue it, carry forward your credits into a retail policy, and pay the premium from your own pocket.
(The writer is CEO, BankBazaar.com)