Wednesday, 24 August 2016

5 Reasons Why Your Company Health Insurance is Not Enough


Does your company cover you under their health insurance plan? However, in the wake of increasing medical inflation, frequent job switching, lay-offs and early retirements, it is important to have a good backup in the form of a suitable Individual Insurance Policy.
Let’s talk about the limitations of a corporate group policy.

When You Switch Companies or are out of Job
If you are depending on your company’s health insurance plan then if you are switch companies, you lose all the benefits earned on the previous policy. In a crisis situation wherein you lose your job then you will be without insurance.

When you Retire or Age
Once you retire, your company policy ends too. At a later age, it is difficult to get an insurance policy and the premiums are very high. Moreover, if you develop an ailment like diabetes, getting a policy of your choice will be nearly impossible. But, if you invest in a good policy earlier, you can enjoy the benefits of claim free years. Your sum insured will increase gradually and you can reap the benefits in your later years and post retirement.

Extended hospitalization
If you happen to be in a situation of an extended hospital stay, the major charges are the room rent and the medical bills. The limited sum insured of your company’s health policy, may not be adequate to cover these charges, leading to heavy financial investment from your end. Your individual policy benefits can be added to your corporate policy and save you from a major financial blow.

No Claim Bonus (NCB) not earned
With a corporate policy, you do not get any advantage for a claim free record. With your individual policy, you get a good history with the insurance companies and you get the No Claim Bonus reward. This is especially helpful, as the according to WHO, the current medical inflation in India is at 20% per year, whereas income increase is at 10%. Accruing a good NCB amount will keep you on top of your medical expenses. As the years go by, you will have a high sum Insured along with NCB with a gradual and affordable increase in premium.

Limited Flexibility
A group insurance policies are constructed according to the company’s policies and at the will of your employer with little or no flexibility to accommodate your health needs unlike an individual one.

The table summarizes the major differences between the two policies. You can get a fair sense of what you can expect from each of them.


Individual
Corporate
Sum Insured
Flexible- at par with medical inflation
Totally at the discretion of the corporate
Extended hospitalization
A decent sum insured usually covers it
The sum insured will not be able to cover it
Pre-existing conditions
24-48 months waiting period
Covered from Day 1 onwards
2-4 years waiting period
Covered from Day 1 onwards
Retirement/Job Switching
Not affected
Ends with employment and had high conversion premiums
Flexibility
Completely flexible
None
Separate
May be included. But most companies are excluding it in current times
Accumulates after every claim free year
Not Available

During claims, make sure you use your corporate policy and run a claim free individual policy for unforeseen and post retirement medical treatments.

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