Why Company provided Group health insurance is not sufficient?

Ramalingam K,
Certified Financial Planner and Investment Advisor
Director, Holistic Investment Planners
Chennai

When we come to this life – parent provide a cover from unseen dangers. A tree –provides a cover from wind and water. Whereas water protects us, further from fire. Therefore, by the law of nature somewhere, someone is always protecting other.

Many employers today, offer a group medical insurance cover to their employees, which include the employees' family members as well. And so, those who don’t dig down deeper for the details starts thinking that they and their family members are prepared for bad health days .

But what do you think is it real case scenario? Or truth is somewhat bitter than this sugar coated candy? Let’s check………..

    1.    Employer’s plan: You must remember one thing that this perk is provided by company to all its employees’ across the board and not fabricated by every employee’s choice. So it may or may not suffice to your need (according to one survey these are covers are as low as 60% annual income of the employer).

It may so happen that your employer may find it burdensome to company’s budget and he may withdraw this facility,

make you pay the premium or reduce the premium (without your concern) to lower down the premium costs.

It may so happen that you have group health insurance with your former employer and after switching over to new company, you do not get any such insurance cover! So are you prepared for such hazardous situation?

    2.    Terms and conditions: It has been observed that many companies are excluding employer’s parents from group health insurance. If it is your case then you need to purchase separate health insurance for your parents. If it is not your case then it may occur to you eventually.

Sometime according to company policy, you need to do a co-payment while making a claim. Here a co-payment refers to the condition where a part of the treatment cost has to borne by the insured person. Moreover, higher room rental for the hospitalization in now a days can make quite a big hole in your pocket. So what do you think? Are you prepared for it?

    3.    Life after retirement: Let us assume that you are 35 year old and you have insured every family member through employer provided group health insurance. Everything now seems picture click perfect, right?

But…...wait…

As you, all know that we always insure or prepare ourselves for bad days or old days after retirement. Nevertheless, do you know that once you retire, your employer provided group health insurance also retires-I mean expires automatically.

So if you have to purchase new health insurance after your retirement then what will be the cost? To be more precise can you afford it that time? Because every insurance company has waiting period of 24 to 48 month on pre-existing diseases,plus the premium rates would increase as it has a direct co-relation with the age of the policyholder and medical conditions undergone in the past.

Considering all this and more, it definitely makes sense to have your own insurance cover purchased directly from the insurance company when you are young in addition to the employer provided health insurance policy. The benefits of having your own policy cannot be over-emphasised.

The cost of medical treatment is increasing exponentially. Lifestyle and age related conditions could burn a hole in your pockets. A recent article suggested that almost 40 per cent of heart patients are between 35 to 45 years of age. One must choose a policy keeping in mind their own, their family’s health conditions, and future requirements. Make sure that your health insurance cover is having a feature of lifetime renewal and no co-pay!

Some research may be necessary before buying comprehensive health insurance cover for the entire family. A good health insurance cover ensures peace of mind and takes care of your and your family's unforeseen medical needs. Remember, a good health insurance plan is the best gift you can give to yourself and your family.

Therefore, don’t you think it is better to be safe than sorry!