Have employer-provided health insurance? Add your own

Many employers now provide group health insurance schemes, but the cover provided is usually quite basic. Arun Balakrishnan, CEO of BerkshireInsurance.com, outlines why it is prudent to take out a personal cover as well

Arun BalakrishnanGroup health insurance is a benefit provided nowadays by most corporate houses. And most employees depend entirely on the health cover provided by the office to meet any medical contingencies.

However, they run several risks in doing so. For instance, the amount of cover is usually inadequate to meet the costs of a major illness.

Also the cover may lapse on retirement, leaving one without cover in the phase of life when one is most prone to ailments. Furthermore, employer-provided policies typically exclude the employee`s parents, particularly elderly parents.

While a group health policy is perfect for minor ailments, it is advisable to get one's own policy as well to meet long term health requirements. If one decides to go for an individual policy after retirement, it will be difficult to get a good deal.

You would end up paying very high premiums and the benefits offered would be limited, as opposed to getting a policy at a young age when you have a good health record and claims history.

Moreover, getting a policy at a later stage would entail losing out on the benefits accrued over the years on the group policy. A no-claim bonus, which leads to a discount on premium, as well as of cover for pre-existing diseases are two of the significant benefits one might lose out on if an individual policy is taken post-retirement.

A change of job can also land you without a cover. Different employers have tie-ups with different insurers and the benefits provided may vary greatly. Some employers may not provide a cover at all. Many executives, at a later stage, transit from salaried jobs to entrepreneurial roles as well. This makes it imperative to take a suitable health cover for the family in the early stages of one's career.

A personal policy will ensure continued protection against medical expenses regardless of your employment and career situation.

Another factor affecting coverage under group insurance is cost-cutting measures taken by organisations in the current economic downturn. Slashing of health benefits is a common means which corporates are adopting to prune costs, limiting the cover available to you.

Moreover, rising medical inflation and the resultant hike in health insurance premiums is further driving employers to adopt changes in the policy plan. Modifications in the policy design, like imposing a low sub-limit on items like room rent, is common. This leaves you with a lower cover and increases your financial exposure in case of an eventuality.

One more common step by companies to cut insurance costs is to exclude the employee`s parents from the policy. It is advisable to get individual cover for the parents or family floater policies which cover them as well, since the older they grow the more difficult it is to get cover at reasonable premiums.

Your employer may agree to extend the group cover to your parents, provided you pay the extra premium yourself. However, in this case if you change jobs the premium will not be refunded. The plan provided by the new employer may not have any provision for coverage of parents, leading to a total write-off of the premiums paid by you previously.

Also, take into consideration the benefits available under a personal health policy. Group policies are usually limited to covering hospitalisation expenses.

There may be various other expenses which are not covered under these policies. Pre and post illness costs like diagnostic tests, doctors` fees, nursing care, ambulance charges, etc may not be included under group covers but may amount to a substantial sum.

Personal policies which provide cover for these tertiary expenses can prove very useful.

Moreover, if you have a personal policy, you can fortify the cover with relevant riders.

For instance, you can go for a critical illness rider which offers a pre-determined pay-out on being diagnosed with a critical illness and is useful for meeting the costs associated with major illnesses like cancer, heart trouble, stroke, paralysis etc.

Other handy riders include personal accident, hospital cash benefit, daily allowance, etc. You can also choose to augment the coverage of the indemnity plan with top-ups to counter soaring medical care costs.

A personal policy thus allows you to craft your health insurance portfolio flexibly as per your specific requirements. So, even if you have an employer provided group cover, it is financially prudent to get a personal cover as well for a fuller coverage and peace of mind.