Most corporate insurance schemes are group insurance schemes. The cover exists so long as the employee remains in the organisation. Even if an employee does not leave an organisation, he can still lose the benefits of the corporate insurance scheme under some special circumstances. If the employee develops some chronic illness while in service and loses his job later, he will cease to be a member of the corporate insurance plan.
Even if he gets cured and seeks an insurance cover on an individual basis, he will be considered as a sub-standard life and may have to pay a high premium for existing health conditions. He may not be allowed the risk cover which he used to enjoy as a member of the corporate insurance policy. Again, the employer may find, under certain circumstances, to bear its share of the cost of premium.
Merits of individual cover
Individual cover, on the other hand, is tailor-made for a particular person. He is free to decide the amount of risk cover, term of the policy, premium paying term and any additional riders. He remains a policyholder no matter change of job or health conditions as long as the policy is kept in force by payment of premiums regularly.
This is a major advantage of buying individual insurance products. Under individual health plans there are always benefits like no-claim bonus, facility of availing policy loan, partial withdrawals and more. In many cases, alterations of plan, term of the policy and the amount of insurance cover can be effected under an individual policy. In corporate insurance plans, no employee has the right to request for alterations. The employer reserves the right to discuss these matters with the insurers and that too, for the benefit of all employees.
Very soon, individual insurance products will be further personalised, to meet the unique requirements of the customers. These will help customers to switch over to healthier lifestyles and improved health conditions will enable the insurers to reduce premiums under the plans. There will be continuous underwriting of risks to arrive at appropriate premiums. It is practically impossible to incorporate such personalised features in corporate insurance products. So, even if a person is a member of corporate insurance schemes, it is important to buy individual life and health insurance.
The writer is an insurance industry analyst
