Protection is Better than Cure

Way to Simplify Life Series – 2

Majority of salaried employees ignore the individual health insurance and depend on mediclaim/health insurance provided by their employer (office health policy). Observations in many cases; the cover provided by the employer are insufficient to counter the growing hospitalization expenses.

Which are the reasons one shouldn’t depend on health cover from the employer, and have a individual health insurance or a top-up on hospitalisation product?

  • The prime purpose of group health insurance is to protect the employer from any mishappenings related to a employee’s health.
  • The employer gives cover for 1-5 Lakhs. It is insufficient as for major illness like heart bypass, Cancer package starts from 3.5 Lakhs.
  • Employer – employee is a group cover product where coverage is constant & not increasing. You can increase the coverage by paying additional premium.
  • There are certain limitations on specific diseases or surgeries.
  • It is normally seen, employees cover their complete family in this product.
  • In health insurance, there are age slabs which also convey the risk. Covering complete family with different age slabs increases the risk of not getting covered completely.
  • Assume, Mr. Rohan has opted for this cover for self, spouse, his child & parents of coverage 5 lakhs. The internal allocation of coverage will be Mr. Rohan- 2.50 lakhs, spouse- 1 lakhs, child- 75k, & parents- 75k.
  • These products are not inflation proof. It barely covers the employee with no additional benefits.

No Claim Bonus is not available in any group cover. It is provided in personal health cover to suffice the additional costs in coming years if you are not claiming in respective year.

Your employer won’t cover you after your retirement.

If you are thinking; I will buy health insurance just before retirement, think again? Because something happens during this period there is a possibility you don’t get health insurance as your application might get rejected due to medical history or you will be charged loading (extra premium) to cover the risk.

The government has increased 80D limit, Government wants its citizens to have enough health insurance as it protects individual from financial liability.

Recently, Government is giving health insurance cover of 5 Lakhs for 50 crores people who are Below Poverty Line. If Government is taking care of their citizens, why you are shying away for taking care of your own family?

Also, it costs average Rs 10000 – 15000 which is very small amount as compared to any medical bills of Rs 2-3 Lakhs.

So it’s always advisable to have a individual health insurance to cover self & family.