Health emergencies are on the rise once again, and amid these times, health insurance is a term that one hears quite often. But if we ask, do you have health insurance? A fairly large population would say yes, counting only the corporate cover provided by their employer. The numbers definitely vouch for the fact that a majority of people – as many as 50-60% of the working population – only rely on their corporate insurance to deal with health emergencies. While it’s great to have corporate insurance as an additional layer of protection, the key ingredient to shield you from rising medical inflation is, in fact, an individual health policy.
A corporate policy alone is just not a good enough protection to battle huge hospital bills that often come unannounced – at least not in a post-pandemic world. Any unfortunate emergency holds the potential to wipe out an entire family’s treasured savings in no time. This holds especially true in a country like India where insurance awareness is low and around 60% of people bear out-of-pocket hospital expenditure. Moreover, the most important factor is that one can exercise much more control and choice in individual policy as compared to corporate one.
Here’s capturing areas where depending only on the corporate policy can leave you with fragmented protection and how an individual policy covers those blind spots.
Low Sum Insured
Sum insured – the primary component of any health insurance policy – is of utmost importance while choosing a policy. The extent of coverage provided by the corporate cover can often fall short of adequately protecting you. The average sum insured offered in these policies can range anywhere from Rs 1 lakh to Rs 3 lakh. This range is substantially low, especially keeping in mind the spiralling medical inflation amid intermittent Covid waves.
Not only this, the data by Policybazaar.com suggests that 27% of people get a coverage of only Rs 1 lakh, and 8.5% get that of Rs 2 lakh – which is alarmingly low as a standalone option. Given the nature of hospital bills in today’s time, it is highly recommended to opt for a retail health policy of at least Rs 10-15 lakh per person. Moreover, policies with high sum insured of Rs 1 crore are now available at an affordable price of Rs 1200 per month. One should always maximize one’s protection with sufficient coverage.
Covering family members
This is another key area where a corporate policy may not cast a safety net wide enough for all. A large number of employer-provided policies do not cover parents, whereas they are the ones who are most prone to a health scare. Secondly, in others, even the spouse and kids don’t get covered, which again leaves you exposed to huge financial strain. Do you know that a staggeringly high percentage of around 69% people take cover only for themselves, while 30% add spouse and children? There’s a meager population of less than 1% that adds spouse, kids as well as parents. Even after adding the family members, the sum insured still doesn’t guarantee sufficient protection. This further emphasizes the need for having a family floater or senior citizen health insurance to provide adequate coverage for the family instead of relying only on the corporate cover.
Staying protected irrespective of the job status
By now, we know how the pandemic has weighed heavily on the job market. Job losses have become a common occurrence in the past two years, and so have medical emergencies. It is, therefore, not advisable to depend only on the employer-provided protection at a time when job security itself is dwindling. Apart from this, if you decide to switch jobs or you retire or choose to start something of your own, you will be exposed to huge medical bills, should such a situation arise. It is important to opt for an individual policy and ensure your protection and that of your family, no matter what your employment status might be.
We live in a world where health issues, including pre-existing diseases across all age groups, are a dark reality. Unfortunately, the diagnosis of these diseases comes as a rude shock, and getting a health insurance policy after contracting a PED may also get difficult. For instance, if one contracts a liver, kidney or heart ailment, it’s quite possible that the insurers might reject the policy altogether. Hence, it’s of paramount importance to buy health insurance as soon as you can, and not wait because you have the corporate policy. In fact, you can save a lot more on the premium if you buy early.
Opting for riders
Riders, or the additional benefits that one gets for extra premium, form an important blanket of protection over your policy. One can customize their coverage and opt for the riders that they need the most; as opposed to the corporate policy, where a standardized product is offered to all. Adding features of your choice might not be a feasible option for the company. However, add-ons like coverage for domiciliary treatment, consumables or OPD expenses can significantly bring down one’s medical cost, especially in a time like Covid.
Limitations like sub-limits and co-payment
Corporate policies often come with a cap on either the sum insured or on the extent of room rent coverage. These are called sub-limits and co-payment clauses in a policy. While under co-payment some percentage of the total hospital bill needs to be borne by the policyholder, sub-limit clauses entails that the policyholder pays a certain percentage of the room rent. With large expenses, these limitations might weigh heavily on one’s pocket. For instance, if your co-payment clause states that you need to bear 20% of the hospital bill, then, if the bill comes around Rs 20 lakh, you will end up paying Rs 4 lakh. Hence, it’s not advisable to depend only on your corporate policy where you have little control over terms and conditions.
(By Amit Chhabra, Head-Health & Travel Insurance, Policybazaar.com)