Is corporate health insurance enough? Finfluencer gives a reality check on owning only company covers

Health insurance:  Employers often provide corporate health insurance as a convenient safety measure for their employees and in some cases, their families. However, with medical costs increasing by 10-15% annually, solely relying on this type of insurance may not be the most financially prudent decision. While it does offer basic coverage, the restrictions and exclusions could leave you susceptible to significant out-of-pocket expenses in the event of a medical crisis.  

Finfluencer Nikhil Jha, an expert in Health and Life Insurance, emphasized the importance of not solely relying on employer-funded group health insurance. He said it is advisable to have an individual insurance policy for yourself and a separate one for your parents.

He emphasized that the health insurance provided by the employer is temporary and only applicable as long as an individual is employed with the company. In the event of resigning, quitting, or losing the job, the coverage comes to an end. When transitioning to a new employer, there is no guarantee that the new coverage will be sufficient or inclusive of parents. Additionally, as one ages, the cost of health insurance tends to increase, making it imperative to secure an individual cover at a younger age.

For instance, Jha highlighted the case of Ram, aged 44, who was diagnosed with cancer while employed. All medical expenses were covered by the corporate health insurance. However, once he lost his job a few months later, he struggled to find a new insurance policy.

Highlighting the features of corporate health insurance, Jha noted:

1. Features: A Corporate Health Insurance Policy is a type of insurance that covers a group of professionals working under an organization against illness, accidents, & other health issues. Corporate Health Insurance is basically a Group Health Insurance Plan.

2. Coverage: It is generally the spouse and children of the working member. Some companies also allow parents to be covered under these policies on payment of some premium.

3. Benefits: Senior citizens can be enrolled. Senior citizens generally due to the existence of some diseases or others find it difficult to get health insurance. Group policies are easier to get even for senior citizens.

4. Settlement process: No waiting periods. Corporate policies generally come with no waiting periods. This means that all those who have a pre-existing disease find it easier to enroll and make claims.

5. Waiver of medical checks: One of the most attractive features is these policies generally waive the need for medical citizens Again this can be beneficial, especially for Senior citizens!

6. No premiums: The premium is paid by your employer. Only if you plan to increase the sum assured or top it up with another health plan, you would need to pay the difference.

Disadvantages of corporate covers

7. Caps on Corporate Cover: Caps on room rent/copay and other details. Group insurance policies generally have a cap on: 
> Room Rent
> Have a co-pay
> Sub-limit on the treatment of diseases.

These problems are not there in an individual comprehensive policy will not have these problems.

8. Coverage amount: Having a coverage of Rs 5 lakh may appear sufficient at present. However, it may not hold its value in the future, especially after 20 years. Thus, opting for a lower coverage amount is a significant issue that may arise with corporate policies. 

9. Policy Tenure:The corporate health insurance provided offers coverage as long as you are actively employed by the organization. However, the policy will be terminated immediately upon the cessation of your employment. Consequently, you will not have insurance coverage until you secure employment elsewhere.

10. Porting corporate policies: Some insurers do allow corporate policies to be ported on the payment of a premium. But only some insurers allow it and this needs to be checked with the insurer. The policy conditions are restrictive though

Insurance advice

Jha suggested: "Should you top up your Rs 5L cover with a super top with a deductible? Yes, you can top the existing cover with a super top-up. But in case your employment is terminated you will have to pay the deductible amount from your own pocket. This can mean multiple Rs 5 lakh claims from your pocket."