Health Insurance

Don’t bank on your employer’s health cover alone

Medical-Policy-BIt is always good to have a health insurance policy provided by your employer. Anyway it doesn’t cost you anything, and may also cover your family members, apart from giving you protection from health risks.

However, even if you are covered under group health insurance, it makes sense to have a personal health insurance policy. For banking only on your employer’s group health insurance may cost you dearly, particularly in the times of crisis.

It is no longer a secret that insurers across the globe are pulling out of contracts with a growing number of organisations. Recently, for instance, health insurance cover to the US-based employees  of Satyam Computer Services was withdrawn as the company had allegedly defaulted in paying the premium to the tune of over $4 million. Something similar may happen with the staff of other companies also if their organisations fail to pay the premium in time.

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Among other probabilities, a company may become bankrupt or one’s policy may get cancelled by the insurer.

There are also the chances of a group insurance cover becoming invalid in case the insurer itself becomes bankrupt or an employee gets terminated as part of a cost-cutting exercise.

Normally also, the cover provided by a company may become invalid when there are changes in the employment contract or if terminated by the employer. The same thing can happen if the employee resigns or retires.

Thankfully, personal health insurance policies don’t suffer from such drawbacks. On the contrary, they have some added benefits over group policies. 

Similarly, if you are in-between jobs or if you retire, there is a possibility that you and your loved ones could be stranded in case of a medical contingency. Or your current employer might be covering your family, excluding your dependent parents.

However, your personal health insurance gives you the freedom to choose the sum insured as per your requirement and  also income tax benefits under section 80D. While no claims by an insured also gives a cumulative bonus, i.e., automatic increase in the sum insured without paying any extra money for that.

It is, therefore always advisable to have a personal health insurance policy even though the employer may be providing group health insurance. 

This is, however, not to suggest that group health insurance is useless. On the contrary, the group cover may have its own benefits.

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