Having health insurance in the age of sky-rocketing medical expenses is nothing less than a boon. A lot of us stick to the group insurance plan provided by our employer and do not think of going for a private plan, but it may not be the most prudent practice. Various things can happen that can deprive you of the employer-provided insurance.

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Every job in a good company comes with several benefits, including medical insurance for you and your immediate dependents such as your parents, children, and spouse. But it is not enough. Insurers will only pay out the amount that was promised if they absolutely have to.

The need for a separate medical insurance

Most corporate insurance policies’ total coverage comes around Rs 1.5 -2 lakh, which amounts to only 20-30 percent of the total expenditure in case of serious health issues. So it is recommended to treat the employer-provided policy as secondary and the private one as the primary policy, in case the former falls short.

Insurance companies, corporates and employers also try to minimise the cost by providing bare-minimum coverage to their employees, such as co-pay and room rent limiting clauses. These policies come usually cheaper and focus on the bottom of the P&L sheet, without taking into account the employer’s well-being.

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In a co-pay clause, the insurer will cover only half the total expenditure of the insurance while the other half is taken out of the pockets of the employee. Similarly, within the room rent limiting clause, the room rent per day in the hospital will only be covered up to a certain amount and will only be extended to the rent and no doctor fees.

This only lightens the financial burden but does not take it off completely. However, most regular insurance policies do not have a co-pay clause and offer a higher insurance amount.

The insurance provided by the employer will only cover you until the time you are employed with that firm. The insurance policy stands invalid the moment your job is terminated. Having separate insurance will help you in case of a sudden job loss.

In a country like India, where most of the families are dependent solely on one or two persons for all their financial expenses, getting insurance coverage that will cover the policyholder as well as the dependents are recommended.

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The employer-provided insurance policy is just a perk to retain employees for a longer time. The power lies with the employer as they can pull the insurance cover without having to worry about any legal ramifications. You may find yourself in a tight spot if your employer decides to save money and stop paying your premiums. They could also remove your dependents from the coverage.

Post-retirement, having medical insurance is a must as health risks are higher. Getting a health insurance in the 50s is a really difficult task as it involves a lot of medical check-ups due to the medical risks involved after a certain age.

There is a good chance that your insurer may not include provisions for the pre-existing ailments in the policy — which effectively means that the insurance provider has no liability or responsibility towards you, should your hospitalization be due to a disease or medical condition that you’ve had prior to taking the policy.

To avoid such scenarios, getting private insurance that will cover pre-existing ailments and extends beyond the retirement age is ideal.

First Published:May 28, 2019 3:58 PM IST