Premium payment is always a head ache. But in life, few basic insurance cover are must go. Regular readers know I am referring to the Term Insurance, Accidental insurance and the Mediclaim. I have already written a lot about these too, so today we shall discuss a common confusion over Health Insurance.
These days’ lots of people are coming with queries that they are having mediclaim from employer – do they still need to buy separate policy. Recently again one reader asked this query & I thought why not take some expert opinion over it. Shailendra’s query is:
“I am 34 and have 5 lakh mediclaim policy from Bajaj Allianz through my organization. And I believe in future also any company I may work will have this facility to provide the mediclaim policy as in my past which is common now. As per you should I still buy one?
I am thinking of buying one 5 years before my retirement so that I can get the no claim benefits as well in the premium.”
You can check basics regarding Mediclaim Policy here.
I asked the same query from some financial professionals – you can check their views:
Shekhar Bansal (Insurance Professional & Health Insurance Ninja) Replied:
Our recommendation is YES. You should buy a personal family floater for at least Rs 3 lakh. Though you are sufficiently covered today through your employer but what if your existing employer changes the HR policy some day.
Employer not buying a cover – Group mediclaims are getting more and more expensive for companies with every passing year. This happens primarily due to increasing claim ratios through group policies. Since companies buy group policies at discounted rates and negotiate better coverage like inclusion of parents, maternity cover and waiver of exclusions, the insurers have started shying away from group policies as it is more of an HR gimmick rather than insurance in the pure sense of it. In such scenarios, the HR policy of your employer may even change to giving to a refund (full or partial) towards your health insurance costs.
Employer changes the configuration of health cover for employees – the employer may even decide to reduce the members of your family to be covered at its expense. In such a scenario, though you would still be covered, your family members may not be. Any contingency arising within the family hits the same pocket.
Employers creating a health pool – big companies have started creating a pool akin to self-insurance to provide health insurance benefits to the employees. Gujarat NRE Coke is a recent example as it has stopped buying group health insurance.
These things impact the person more on the day he/she decides to quit the job to either change the employer or become self employed.
A 3 lakh cover provides more or less for a major contingency in case your company’s cover was to vanish altogether. Also, if your insurability was to get damaged some day, having your own health insurance will not let you compromise on your career decisions.
Manikaran Singal, CFP Replied:
As far as your query is concerned, though you are covered by your employer provided policy but please understand that here employer has covered his liability not your responsibilities. Due to hectic and pressurized work culture now day’s young people are more prone to health problems. Blood pressure, migraine and heart issues are normal these days. And moreover if you have family history then that this will in turn add to the problem.
In your working life if you are diagnosed with any of major health problem, then it would be difficult to get adequate health policy for you after retirement or even 5 years before that.
Secondly – your belief may be wrong that when you change job then your new employer will provide you with adequate cover. Looking at current trends, employer provides the basic cover to employees and if employee wants more than he/she would have to shell out some money out of his/her own pocket. The benefits which used to come in the group cover have also got reduced.
Thirdly – God forbid, if there comes any gap between changing of jobs and you face some medical problems in that period then you will have to bear the burden out of your own savings.
So I believe that one should buy adequate cover separately of the employer policy.
Kiran Telang, CFP Replied:
My view is that Health Insurance is necessary even if employer provides it. Reasons:
Job losses are becoming common. So you might suddenly not have a cover when you lose a job.
Breaks between jobs might occur, and also there can be a delay at the new organization in paperwork, denying you the benefits of health cover for a short time. That is a risk.
Pre-existing diseases are excluded/covered after a pre-determined time or can lead to loading. This can be avoided if health cover is taken at earlier age when health conditions are good. If you decide to take health cover at 55 ages, these factors will come into play.
Jitendra Solanki, CFP Replied:
Group Insurance is becoming a loss making business for General/Health insurance companies. I recently visited a company with more than 1500 employees and got information that the Group Health Policy, which was taken by the company last year, is being cancelled by the insurer because the claims in first year itself was more than double of what they received as premium. Hence, most of the employees will face problems on group coverage where either they have to shelve more premiums or the benefits being reduced going forward.
Even in a standalone health insurance policy, there are waiting period of 2-4 years for many illnesses. Some of these are very frequent when you go higher in age. So it’s necessary that you continue with same insurer for at least 4-5 years to reap the maximum benefits. Also, with underwriting becoming very stringent in many companies, taking a health insurance policy at higher age can prove to be costly with- either companies charging higher premiums or there can be permanent exclusion on some specified illnesses. Hence, one should always buy separate comprehensive health insurance coverage apart from a group health insurance policy.
What you should do now?
Verdict from above experts is very much clear that one should buy separate health insurance policy over and above his existing group mediclaim policy from his employer. The point again here is – if you are expose to risk (may be a little bit in quantity or for temporary period), you need to cover it. That is prudent risk management and when this risk is towards life; any delay or lethargy will hit back hard.
My suggestion is to visualize your situation & analyze your policy – then decides the plan of action. If you have questions related to this feel free to ask.
You can also share your practical experience that will be of great help to other readers.