Should you buy a health cover even if your employer is covering you?

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Updated: February 17, 2017 3:21:24 PM

There is no better incentive/perk than a group health insurance provided by an employer to his/her employee, considering the rising cost of medical treatments in India. A group health cover is extended to an employee by his/her employer and the premium is mostly paid by the employer/ organization.

The personal health policies have a waiting period of 2-4 years for the coverage of pre-existing diseases, which is not the case with group health covers.The personal health policies have a waiting period of 2-4 years for the coverage of pre-existing diseases, which is not the case with group health covers.

There is no better incentive/perk than a group health insurance provided by an employer to his/her employee, considering the rising cost of medical treatments in India. A group health cover is extended to an employee by his/her employer and the premium is mostly paid by the employer/ organization.

A major advantage of being covered under a group health cover is that pre-existing diseases are covered from the start of the employment till the last day of work of the employee. “Rising lifestyle diseases have increased the chances of a major disease or critical illnesses getting diagnosed at an early stage. In such cases, it becomes difficult for an individual to buy a personal health cover/mediclaim,” says Rajiv Kumar, MD & CEO, Universal Sompo General Insurance Co Ltd.

Also, some of the personal health policies have a waiting period of 2-4 years for the coverage of pre-existing diseases, which is not the case with group health covers.

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However, sometimes banking only on a group health cover may cost one dearly, particularly in such times of crisis. It is no longer a secret that insurers across the globe are pulling out of contracts with a growing number of organisations as these organisations failed to pay the premium in time.

“Among other probabilities, a company may become bankrupt. There are also the chances of a group insurance cover becoming invalid in case the insurer itself becomes bankrupt or an employee gets terminated as part of a cost-cutting exercise,” says Pavanjit Singh Dhingra, CEO, Prudent Insurance Brokers.
Another disadvantage of a group health cover is that all family members are covered under the same policy. Though the chances of all family members being hospitalized in a year is very slim, but one cannot rule out the fact that uncertainties may strike at any given point of time. Also, the sum insured in group health policies are not adequate to cover the rising health case costs.

Thankfully, personal health insurance policies don’t suffer from such drawbacks. On the contrary, they have some added benefits over group policies. For instance, your current employer will provide health insurance cover only till the time you are employed with them. But that is not the case with your personal health insurance, which you can continue life long or as long as you wish. Your personal health insurance gives you the freedom to choose the sum insured as per your requirement.

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“Therefore, it is strongly advisable to opt for an individual health insurance policy or a top-up health policy even if you are covered by a group health cover. This also helps you minimize the financial losses in case the total cost of any medical treatment is over and above the sum insured offered under the group health policy provided by the employer,” says Kumar.

It is, however, prudent to buy a standalone health cover at an early age as detection of any disease may either make buying a policy difficult or raise its premium. The premiums too are affordable if the health cover is bought at an early age.

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