Should you buy Mediclaim even if your employer is covering you?

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.

Check – Health Insurance Policy for Parents

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.

Check – How much health insurance I should buy

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.

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Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice & TFL Guide Blog in 2009. "The Financial Literates" is a dream & mission to make Indians Financial Literate.

49 COMMENTS

  1. Experts,
    Suppose I buy an additional health insurance cover on top of the company group mediclaim policy. Lets take a case where both policies provide an individual limit of 25,000 on hospitalization for maternity reasons. (I am assuming that company group policy will cover at least 70% of most of my medical expenses.)
    In case the bill comes to 40,000, will I be able to cover the entire amount using both policies, say 25K from group mediclaim and 15K from personal policy.
    Unless this works, I see little point in paying for additional cover, if I can only use each policy exclusively for any specific hospitalization.
    Would like to understand this in context of going for multiple policies.

    • Hi Jaydeep,

      In such cases the two companies will decide mutually what is the ratio each of them is going too pay. Like life insurance company health insurance benefit is given for covering your medical emergencies. If individuals started claiming from multiple companies everyone will be in a profitable situation which goes against the objective of Insurance.

      Also, as we have mentioning group policies are fine till you are with the company.What happens after then? What if suddenly company reduces benefits in your policy say stop covering parents.Then you will have to scout for a standalone policy. At higher age there are not enough policies and existing one are majorly co payment policies limiting benefits they provide.Even in your case if you join another company the benefits may not be the same. Some companies do not give you high coverage.

      Hence to protect you and your family from all these difficulties there is always a need to cover from a standalone policy and not rely on group insurance.Also, as i have said in my quote, you reap maximum benefits when you continue for at least three- four years with the insurer as waiting periods of most illnesses gets over.

      • Hi Jitendra,
        Thanks for replying. So what i understand is that you can make a claim to both companies and actually get the full amount. doesnt matter what the ratio is. I will have to ask this question to both my group and individual insurer before signing up for my new policy.
        Although, I dont agree that the claimant will be profitable since he is already paying premiums to both companies and claiming only in case of medical emergency.

        So I am trying to understand the strategy: considering I am already on group mediclaim, is it advisable to start an individual policy with some basic coverage for the entire family as additional medical risk cover? Is it possible to increase coverage on this after few years if need arises.

        • Jaydeep,

          It all depends on the payment clause of respective companies and the maximum limit they have.If the limit from any company allows the payment of up to your claim you will receive it The ratio is decided by companies mutually.Say, a policy holder has two policies—one for Rs 2 lakh and the other for Rs 1 lakh. If he makes a claim of Rs 1.5 lakh, the first policy will pay 2/3rd of the amount (Rs 1 lakh) while the second policy will pay the remaining 1/3rd (Rs 50,000).

          However, you may face problems like getting two original documents from hospitals to submit with both companies. The cashless treatment is the most tricky part and sometimes leads to lot of confusion..Also in past many individuals have done this for receiving higher sum so companies also look these cases very minutely which may delay the process.Hence it is advisable to claim from primary insurer.

          The amount of coverage will depend on your residence and your income.If in metros, no less than Rs 5 lakh cover is sufficient enough.To buy a floater or individual need to do a bit of research.If the premium difference between two options is not very large go for individual.Or combination of individual and a floater can also be helpful.

          You can start with basic coverage and later on look at Super surplus policies to enhance it. These policies charges you very less premium with high coverage and have deductibels of Rs 3 lakh or Rs 5 lakh.But take them early as they also do have waiting period.

    • Jaydeep. Yes you’ll be able to claim the entire 40,000 amount. Otherwise the whole point of having the additional cover becomes quite useless.

      • Hi Sumeet/Jaydeep,
        Insurance is a great product but we realize its importance only when we don’t have it at the time of emergency.
        Let me quote a real example: My sister is working in one of the biggest corporate house in India & she is in HR department. They have some group mediclaim policy & last year there were some changes – employees were asked to contribute some premium & she paid the minimum required amount. Thinking that even hubby’s group mediclaim can be used if required. (Hubby is also working in top co.) Couple of month’s back she was hospitalized & bill was over Rs 2 Lakh. She thought she will get this from insurance company – she got a rude shock when she was approved just 30% of the claim amount. As she opted for minimum payment in co. policy & there was one clause that your bills will be settled in ratio of hospital room cost. Approved room rent was Rs 3000 but actual room rent was Rs 10000 per day. She also not got anything from hubby’s policy as he was in process of joining new company. She paid more than Rs 1.5 Lakh from her savings. 🙁
        But let me add – whole world around your personal life can’t be insured. You can retain some risk with you if you really understand its impact.
        Also remember kiran’s point “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.”
        So my suggestion is visualize your situation & analyse your policy.

  2. Dear Sir,

    I (age 31 yr) want a health insurance for my family – wife (age 28 yr), Child (age 2 yr) Parents ( age )59 & 52 yrs. At present I have cover of Rs. 100000 from my employer. What things shall I consider while taking health insurance, which riders shall be taken and how much Risk cover shall be considered. Please suggest the best suitable plans for me

  3. please answer this query
    I am an retired senior executive from PSU ,BHEL and covered for OPD and indoor Treatment facilities on reimbursement basis under employees contributory Health Scheme of company ,Do I still require to take Mediclaim Policy .if yes in that case which is the best option to cover self ,wife, son /daugter in law and grand daugther in a composite policy with tax saving benefits.
    thanking you
    drukgupta

    • Hi Dr Umesh,
      As such you don’t require insurance but again this is about visualizing your situation.
      Make sure that this benefit is available in all good hospitals. Think of 2 hospitals where you will go in case of emergency – will government provide partial or full amount in case of treatment. Also talk to your friends who have already availed this benefit.

    • Hi Sudhanshu,
      CGHS is again a contributory scheme where some amount from your salary goes towards payment of its premium. But I am not sure about coverage of hospitals – again a case of visualizing your situation.
      Let me add my Mom’s example: My mom is state govt teacher & getting some group mediclaim benefits. I told my mom that you should also have separate health insurance policy but she doesn’t agree with me. She said we get almost 100% reimbursements – meri chinta karne ki jaroorat nahin hai apne clients ki karo. 10 years back I met with an accident & we got around 90% reimbursement – other than this we never have to use mediclaim.
      Recently Mom met with an accident & had a fracture. Doctor told it will be operated (surgery is a product available with doctors – some time they push it even if it is not required. Are we as an advisor following how they work or they are trying to mimic financial advisor in their profession. Clueless…) There are 2-3 type of rods & my mom want best one (swiz titanium plate) – budget was more than Rs 60-70000. Mom had a word with her office staff & came to know that they will not approve this expensive plate. Even she will have to be operated in either govt hospital or 2-3 other smaller hospitals where they have tie-up.
      My mom said she wants to have this plate & also operation in Fortis – budget was… you can just think. Luckily we consulted some other doctor & he told there is no need for operation. (still we have some good doctors) She is fine now.
      Lesson is visualization. 10 year back I was operated in govt hospital but time has changed.

  4. Please suggest a family insurance coverage in for an NRI to cover:
    1. Family of 2+2 – both individual limit and family limit
    2. with an option to add mothers of both the spouses.
    3. To cover in Gulf country as well as in India
    4. Cashless facility is preferred

    Note: (1) In Gulf countries, employee is covered by employer but not the family and the insurance coverage by employer is not sufficient.

    Thanks.

  5. Hi,

    I heard that insurance company can deny renewal of your medical insurance anytime at their wish. Is it true? if yes than any one can end up in a situation where he found himself without insurance cover at the time whe he needs it most.

    • Hi Rajendra,

      No insurance company denies mediclaim at their wish.

      Please understand Like life insurance when you buy a mediclaim you are actually entering into a contract with the company which they have to abide by.For similar reason the company makes you sign every information they are taking so that they have a proof that you have agreed to the terms.
      But most policy holders do not read policy wordings which actually states company terms and conditions. If you go through it you can find every detail what is covered and what is not.Like It states that if you do not disclose any preexisting disease it will be taken as information suppressed and so is not covered.

      Hence in buying any kind of insurance it is necessary that you understand their terms to save yourself from any dissatisfaction during claim.If any of the terms i snot fulfilled the company can deny the claim.

    • Rajendra,

      For renewals at higher ages the risk of getting a claim is high for companies.So previously they were not issuing any policies after a ceratin age.But with IRDA stepping in now you one can buy policies at even age of 75.
      However, renewals do also depends on certain factors like claim history.Today company do not deny renewal but can exclude specified illness if they found it poses high risk of getting hospitalized.Or they may put a loading i.e. charge extra premium during our renewal.The renewal can be denied in very extreme case when the company is sure that policy holder has very high probability of getting hospitalized even in coming year.

      Hence, renewals are there but loading,exclusions etc are also present as per your claim and medical history.

  6. Dear Jitendra,
    Nice views but I have one comment. If we have group insurance policy through the company and also personal Mediclaim, I was told that We dont have to declare the Group insurance policy to the Private Insurer as it is borne by the company . It is mandatory to disclose only if you ahve policy in your name (like oe fro National insurance and one from ICCI). Also it is always better to utilize the company fully before touching your personal insurance. Better to let it grow with no claim Bonus’s.

  7. Dear Hemanta

    My father age 55 and mother age 53. I want to a medicliam policy for them . Appolo munic easy helath std. is it best for them or anything else pls suggest me.

  8. Pl suggest a good policy for my family of 4. husband 51,myself 49,daughter 20 and son 17.both of us have group ins pol from our employers. which mediclaim policy is beneficial and whether 5 lac family pol would be sufficient .is appollo munich pol a good option

  9. Hello

    My copmany provides me 80% of actual bill (unlimited). So if in case of hospitalisation say 100000, i would get 80000 (taxable).. so actual amount I get claimed is ~56000. Since I have unlimited medical claim, should I opt for medical insurance or health policy?

    • Hi Arun,

      Yes you should since group insurance is till your employment with the company and you may have to go for a fresh one when you need the most at higher age.Availing no will benefit you in maximizing the benefits in later years of life.

  10. could u pls throw some light on child plans, like recently lic launched jeevan ankur .
    which one is better smart kid jeevan ankur or any other such child plan.

  11. Dear Mr Hemant ji

    It is good article and as per your advise, I am interested to take a new policy for me and another for my parents (My company provides group medical insurance for my family and for my parents separately).

    Request you to clarify me, is it mandatory or required for me to declare to the new policy vendor about the existing policies or not required to mention.

    Also request you to suggest a good policy for my parents (father – 57 yrs & mother – 52 yrs). Father is Diabetic. I am sure that my present company parents policy will cover them for at least for next 3-4 years of period and hence, the existing diseases are covered under my present policy.

    Pl. clarify me about the 2 issues., Thanks, KK Babu

  12. In case of two personal family floater health insurance, is it compulsory to declare one mediclaim policy details to another health insurer? i.e. is it ok to utilize entire amount in case of claim from 1st insurer only and not at all disclosing to the 2nd insurer if SI of 1st insurer suffices the claim amount?

    • While taking a policy you should declare any previous policies you may have.

      While filing a claim if you are taking it only from one company then no need to inform other company about the claim.

  13. Query Regarding Group Health Insurance by Company and personal family floater and Super Top Up Policy .

    Hi,
    I have Group health insurance cover cover of 4 Lacs for my my family ( self , Spouce and One Kid) and A Family floater of Apolo easy heath of 3 Lacs.
    My query is as below
    1- Do I need to Iform TPA of both insurance companies in Case of Hospitilisation?
    2-Is it possible that I can opt benefit only from my group health insurance till the limit is not exhausted i.e. 4 Lacs and If Limit crosess 4 Lacs then I can inform my personal health insurance company also. Because If claim from my personal health insurance company there will be reduction in No Claim Bonus
    3-I want to take a Super Top Policy from some comapny for 7 Lacs with 3 Lacs deductible ? Do I need to declare Group Health insurance cover while taking the same?

    Thanks & Regards
    Pradeep

  14. Hi Experts,

    I am working in an organization serving notice period .My dad is hospitalized and my last day in my org is after 1 week from now. Will the policy given by my employer will be applicable when I leave the org. as I had already paid the huge premium amount in my current org.

    Please reply , quick reply will be highly appreciated.

    Regards,
    Varun

  15. I have a query – I have a policy of Rs 1 lakh with 20% co-payment condition. In case I incur a medical expense of 1.5 lakhs, what will my medical company reimburse?
    1. Rs 80,000 –> 80% of the policy coverage
    2. Rs 1,00,000 –> 80% of the medical expense, subject to maximum Rs 1 lakh, the policy coverage?

    Please help me understand.

    • Dear Saket,

      A co-payment clause is applicable either on Sum Assured or on the bill amount. In case it is on SA then company will check all other sub-limits and within those will reimburse 80% of the amount. Similarly it will happen on the bill amount.

  16. Hi Experts,

    I have taken one family floater policy comprising of my married sister ( for maternity claim ) and my mother. At the same time, my brother in law also has got the mediclaim policy of the same insurance company from his office.

    My question is, will I be able to claim the amount from both the policies in case it gets exceeded from any of the single policy ???

    Thanks,
    Prasad

    • Dear Prasad,

      In case of multiple policies, the two companies may pay you proportionately. However, if one is a group insurance and other a standalone policy, you should get the claim if it exceeds. You should check with your company to know their claim procedure in such cases to avoid any dissapointment later.

  17. Hi,

    I have been insuring my parents through our companies group insurance policy for parents for the last 4 years. Now if I decide to buy a health plan for them from outside, would the pre-existing illness clause be factored in. They have been insured for more than 4 years and there is no health insurance claim during this period.

    Please advise.

    Regards,
    Nishant

    • Dear Nishant,

      With portability of group insurance to individual plans now, it can happen. But the decision of which benefits to continue rest with the company.

  18. Dear Sir,
    I have taken GHPL Health insurance (Self +Spouse)in Feb 2010 from Andhra Bank, now i want to switch to any other insurance company but i afford only Approx Rs 4000 Premium a year, so please tell me which is the best policy with no caping and best result,
    For your information i have talk to Tata AIG, Max Bupa-Health Companian, Apollo Munich- easy Health, HDFC ERGO- Health Suraksha, Bharti Axxa.
    So i please suggest and tell any agent where i can buy the policy, because i do not want to buy directly because they will not help at the time of claim.

    Sandeep Katyal

    Faridabad
    Age 34
    M 9811486831

  19. Dear Sir,
    I have taken GHPL Health insurance (Self +Spouse)in Feb 2010 from Andhra Bank, now i want to switch to any other insurance company but i afford only Approx Rs 4000 Premium a year, so please tell me which is the best policy with no caping and best result,
    For your information i have talk to Tata AIG, Max Bupa-Health Companian, Apollo Munich- easy Health, HDFC ERGO- Health Suraksha, Bharti Axxa.
    So i please suggest and tell any agent where i can buy the policy, because i do not want to buy directly because they will not help at the time of claim.

    Sandeep Katyal

    Faridabad
    Age 34
    M 9811486831

  20. I have a Jeevan Arogya policy against which I dint get the health cards till today . The said policy is running since 2011. What is exactly the usage of these health cards ? Secondly my policy has completed 3 years . What are the coverages applicable on customers with three no claim years

    • dear as ihave purchasedjeevan arogy7a i gota policy by may 13 after that i forget to pay prm bymay 14 i pay it by june revivaled now ihave a problem in my ear as i have swellealingin my middle ear so i need to my staptese by titaneum so pl tell much how much waiting for claim is requimg hwen i should submit my operation so i can put aclaim

  21. Dear Sir,

    I (32 Yr.)have mediclaim policy for me and my wife. I recently got divorced from my wife. Now what happens to my policy. can i remove her name from it? can i get revision in my yearly Premium? What should i do? please advise.

    Please advise.

  22. Dear Sir
    I have a New India Assurance family floater medi claim policy of 5 lakhs covering me and my spouse. I get the 80 D benefit of it as well. Can I take another medi claim of 5 lakhs from the same/another company with my wife as principal insured and me as spouse, so that she gets 80 D benefit and both of us are covered by the 2nd policy as well, so we have a total health cover of 10 lakhs ? Which public/private company should I opt for as the second insurer ? Is LIC Jeevan Arogya a good alternative ?

  23. Experts
    We are retirees from a PSU Bank & against some one time payment from our final bill, our Bank has given medical cover of Rs 8 lacs for life (means we have to accommodate all our hospitalization expenses for our entire life within Rs 8 lacs )for our family. Since this amount would be insufficient, our Association has been pursuing with the Management to enhance it upwards.Recently the Bank has tentatively offered a Group Health Insurance with comparatively very low premium ( pending finalization of offers receivable from various Insurers, say of the order of Rs 12000 for Rs 5 lacs & Rs 18000 for Rs 10 lacs cover for the ex-employee & spouse) & taken up a survey as to how many want it. We already have our private/own Mediclaims of Rs 5-8 lacs ,separately for self & spouse policies to top up Bank’s limit of Rs 8 lacs .
    Now our question is whether despite having Bank’s Rs 8 lacs & proposed contributory Group Health Insurance, should we also continue with our own Mediclaim ONLY TO COVER the eventuality that at future date, Bank’s HR policy changes or its insurer backs out, whereupon we may not get any Insurer at that advance age.

  24. An important aspect seems to be missed out in this trail of queries and answers.
    In a Group Health Insurance Scheme for employees or retired employees by a
    Bank or a Company, are the subscribers eligible for income Tax benefit under
    Section 80 D ? Thanks.

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