Is your employer health insurance sufficient to cover your healthcare needs?
Most corporate employers provide group health insurance plans to their employees. Group policies occupy almost half of the health insurance market in India. Group health insurance provides coverage to a group of people under a single policy. The company pays the premium for these plans.
With the pandemic leading to unemployment, millions will be losing the health insurance benefits that come with their jobs. Sooner or later, everyone may need health insurance.
Let’s look at different scenarios of company-provided health insurance and what you must do in each case.
- What if your company does not provide health insurance?
- The benefits of health insurance provided by employers
- The limitations of health insurance provided by employers
- When your company provides health insurance
- What kind of health insurance should you buy?
What if your company does not provide health insurance?
Today, health insurance is a necessity. Rising medical costs, increasing illnesses and health-related uncertainties have made it essential for everyone to have a comprehensive health insurance plan. While many employers provide health insurance coverage to their employees, a large number of professionals, around 65%, do not have the security of health insurance.
There are both limitations and benefits of group health insurance.
The benefits of health insurance provided by employers
- Group health insurance covers pre-existing diseases from the start.
The limitations of health insurance provided by employers
It does not provide flexibility, meaning, the insured cannot change the sum insured, port the policy or add another member to the policy.
- It does not provide any tax benefits to the insured.
What if your company provides health insurance?
As discussed earlier, group health insurance provided by employers has limitations. Even if you are covered by a group health plan, in most cases, it is wise to buy a personal or family floater plan to secure self and family. Let’s look at the reasons for this.
- Group health insurance may not be comprehensive or may not match your healthcare needs, hence it is advisable to supplement your employer-provided health insurance with a personal or a cv.
- Employer-provided insurance plans cannot be customized to meet your specific needs, hence a personal plan, in addition to the group health plan would ensure you have coverage that you can actually utilize.
- Group health insurance plans are limited in the period, meaning, once you leave the company, your health insurance may cease to be, whereas personal health insurance has lifelong renewability. It is advisable to buy a personal plan even if you have insurance provided by your employer.
- Here’s a pro tip: buy a personal plan of a small sum insured to supplement your group health plan. Once you leave the company, increase the sum insured of your personal plan. That way you would benefit from the personal plan in many ways: get a no-claim bonus, get a tax benefit, pass the waiting period, and enjoy all the loyalty benefits that insurers provide to long-term policyholders.
- Many professionals plan to buy a personal health insurance policy only after they leave a company or after retirement. Remember, health insurance premiums go up with age; the older you are, the more expensive the health insurance plan would be. Hence, do not wait until retirement.
- Medical costs in India have been on the rise in the past years. The sum insured provided by employers mostly ranges between Rs 2 lakh to Rs 4 lakh. This amount may not be sufficient to cover your medical emergency costs. Most people in India are underinsured, which means they do not have adequate health insurance coverage.
- E.g., if your parents develop a critical illness, the sum insured of the group insurance may not be adequate to support their medical treatment. It may lead to your depleted savings and even debt. Instead, buying a separate critical health insurance plan for your parents would be a better choice.
- Group health insurance provided by employers does not provide tax benefits. Having personal health insurance can help you save taxes.
- Moreover, employer health insurance may not cover all your family members. Typically, group health plans offer coverage only to the employee or to the spouse or parents. If you have children, you might want to consider buying a family floater plan or a personal health plan for your children.
What kind of health insurance should you buy?
By now it’s clear, a health insurance plan in addition to the one provided by your employer has advantages and is a wise choice. But what kind of health insurance must you buy?
Individual or personal health insurance
Designed to offer coverage only to an individual person, the premium for individual health insurance is calculated by considering factors such as age, pre-existing health conditions, current health status, lifestyle and habits, family medical history, the claims history of the policyholder, and of course, the sum insured. Certain types of individual health plans offer flexibility for adding new members to the existing plan. For e.g. spouse.
Who should buy individual health insurance?
- Those individuals who do not have dependents (spouse and children) should buy this type of insurance.
- Individuals who are covered under a group health insurance provided by their employer must go for personal health insurance, as the sum insured may not be adequate. Moreover, they do not get tax benefits under group health insurance, whereas a personal plan would provide tax saving benefits.
- Individuals who have family members with a wide difference in age must opt for an individual plan so as to pay a lesser premium.
- Individuals who are healthier or have a serious health issue should go for an individual plan, not a family floater.
Family floater health insurance
Family floater insurance plans offer coverage to different members of a family under a single umbrella policy. Spouses, children, parents, and in some cases, extended family members such as siblings, grandparents, and more, can be a part of the same health insurance policy.
Who should buy a family floater plan?
- Those who have a large family should consider family floater insurance as each member can avail of a larger amount of coverage with a smaller premium.
- Those who have children, spouses, and parents who do not have any serious ailments should go for a family plan, as the premium for such members is affordable and not high compared to policies that insure people with diseases.
- Those who have a limited budget should opt for a family floater plan as it turns out to be comparatively cheaper than buying individual plans for each family member.
- Those who have family members who have serious health issues like diabetes, cardiovascular diseases, and cancer, should not opt for a family floater.
Senior citizens’ health insurance
Senior citizens’ health insurance plans are specially designed for citizens above the age of 60 years. The premium for senior citizens’ health insurance policies is usually higher considering the age of the policyholder and the health risks attached to their age as the probabilities of senior members utilizing insurance benefits are much higher.
Who should buy senior citizens’ health insurance plans?
- Those who have senior members in their family must opt for a senior citizens health insurance plan as it provides more benefits. Moreover, it is financially smarter to buy a separate senior citizen plan and not have them in the family floater plan.
- Those aging individuals who do not have family and children to financially support their healthcare needs should buy senior citizens health insurance plans as financial protection for their future needs.
Let’s answer this question with different case scenarios. The kind of health insurance you must buy depends on your healthcare needs.
- A single person with no dependents: a personal plan would be sufficient.
- A person with dependents: spouse, children, and parents – a family floater plan would be a better and more economical choice.
- A person with senior parents: senior citizens’ health insurance plans would provide the required healthcare coverage.
- A person with family members with critical illnesses: should go for personal plans for their family members according to individual needs. Insurers provide plans specifically designed for different critical illnesses.
- A married person planning to have a child: a personal plan with maternity coverage would make the financial burden that comes with maternity and newborn baby easy.
Health insurance provided by employers has limitations as well as benefits. Those professionals who want to plan their financial portfolio must consider buying a separate personal or family floater health plan even if their employers provide health insurance. Already decided to buy a health insurance plan? That’s great! Reach out to our representatives to take you through the different health plans and how we could customize them for you.
FAQs: Employer Health Insurance
Should I buy personal health insurance even if I am covered by insurance provided by my employer?
Yes, it is advisable to buy a personal health plan even if you are covered by a corporate health insurance offered by your employer. There are many reasons for this:
Corporate health insurance has limitations
Employers provide a limited sum insured, which may not be sufficient for your healthcare needs
Once you resign or retire, your insurance plan may not exist and you would have to buy insurance at a much higher premium owing to your age
Can corporate health insurance policy be converted to individual health insurance?
Many insurers provide the option of converting a group or corporate health insurance into a personal plan when the employee retires or resigns and leaves a company.
How does health insurance provided by employers work?
Health insurance provided by employers provides similar coverage benefits provided by personal health insurance plans. The premium for this insurance is typically paid by the employer or gets deducted from the employer’s salary. Group health insurance may or may not provide coverage to the employer’s family members.