It’s almost a norm these days for companies to provide some kind of free health insurance coverage for their employees. The idea is simple, companies don’t want their employees to lose out on a major portion of their savings in tackling a medical crisis and want to share the financial burden. However, notwithstanding the noble intentions, these company-linked health insurance plans may not provide adequate protection.
Let’s see how.
1. Directly linked to your employment tenure
This is an obvious one. The moment you leave the job, you instantly lose out on the health insurance benefits. And there’s no guarantee your next employer will provide you with similar medical insurance coverage. Worse, you might find yourself in a difficult financial situation if something untoward happens before you join the next job. Relying only on the company-linked plan can turn out to be a costly mistake.
2. Insufficient coverage value
If you’re of the opinion that the coverage value of your company-provided health insurance plan is sufficient, think again. It’s a fact that medical costs are on the rise and your company-linked policy may not be sufficient to bail you out of a medical crisis.
For example, a Rs. 2 lakh sum assured is likely to get exhausted in just a few days if someone gets admitted to a private hospital in any of the metros. It’s always safer to go for an enhanced coverage amount (of at least Rs. 5 lakh), especially if you have elderly beneficiaries to include in the policy ambit. Factor in your age, your health situation, number of beneficiaries, their health condition and your city while assessing the adequate medical insurance coverage amount.
3. Absence of comprehensive coverage
The biggest advantage of buying an individual health insurance plan is the flexibility it provides for policyholders to customize their insurance plan as per their requirements. The option to go for essential add-ons like critical illness cover, pre and post-hospitalization cover, domiciliary treatment expenses, maternity benefits, health maintenance benefits, so on and so forth may be missing from the “one-size-fits-all” office health plans.
4. Lose out on No Claim Bonus
Another feature that is usually included with a number of individual health insurance plans is the No Claim Bonus (NCB) that is added to the sum assured on policy renewal, if there have been no claims made during the previous policy year. This really makes a huge difference as a 25 per cent NCB could mean doubling of the sum assured in 4 policy years without a major hike in annual premium! Office-provided health insurance plans generally do not have this benefit.
Choose individual health insurance plans for complete peace of mind
Some would argue that even the office-linked medical plans carry certain advantages over an individual policy. Firstly, they come at no cost to employees. And secondly, they don’t have any riders on pre-existing medical conditions. Let’s look at both arguments.
Yes, office plans are largely free (some company-provided plans actually allow employees to enhance the sum assured, over and above the default coverage amount after paying a premium), but they are still limited policies linked to employment tenure. For complete peace of mind and long-term protection, it’s always better to go for an individual policy.
Also, it’s a fact that individual health insurance providers have certain restrictions in place when it comes to pre-existing conditions like diabetes and hypertension. They ask policyholders to go for a thorough health checkup (especially for a policy with a high sum assured) and based on the test findings and medical recommendations, they lay down a waiting period (not more than 4 years) for certain ailments linked to the pre-existing conditions. After the waiting period is over, even pre-existing conditions are covered in the health policy.
Make an informed choice
The key lies in carefully comparing all the health insurance options and going for the one that meets all your requirements. You should closely analyse the add-ons on offer, and research on the ease of claim settlement process. At times, choosing a policy purely based on the low premium amount may turn out to be counter-productive as certain crucial benefits (like critical illness cover, post-hospitalization charges, etc.) may not be included in the policy.
That being said, it’s always advantageous to start a health insurance policy when you’re young (and healthy) – something that reduces your health risk profile and gets you a good coverage amount without steep premiums.
Having adequate health insurance coverage for your entire family is one of the most important things to weave a financial safety net as it protects your savings and investments when you have to tackle a medical emergency. And if you want to tick all the boxes when it comes to health insurance, you may find your office-provided policy wanting in certain critical areas. So go ahead, secure a healthier financial life by making an informed choice.
The writer is CEO, BankBazaar. The article has been published in collaboration with BankBazaar. Opinions expressed are those of the author.