Corporate vs Personal Health Insurance: Optimal Coverage

Corporate vs Personal Health Insurance: Optimal Coverage

Introduction

When you get a new job, corporate health insurance may seem like a very significant incentive. And it certainly is. Getting health coverage for yourself, and in some cases, your family members too, can be a great benefit. In a time where India’s medical inflation is at an all-time high of 14%, and the healthcare expenses seem to be skyrocketing, having the umbrella of a health insurance policy is indeed a load off your chest.

But, despite offering a long list of benefits, there is something that you need to ponder, “Is my corporate health insurance enough?” Unfortunately, more often than not, corporate/group health insurance is not enough.

Reasons to Consider Additional Coverage

Let us discuss the various reasons that may hint at buying additional coverage:

1. Your employment status decides the coverage: The most important reason why corporate health insurance is not enough is that it’ll offer coverage only till the time you are an employee of that very company/firm. Once you leave the job, you will lose the coverage along with any other rewards that you may have earned. Another aspect to consider is that once you retire, your medical coverage would also come to an end.
2. A lower and possibly inadequate health insurance coverage: Most corporate plans provide a sum insured of up to INR 5 lakhs. Unless you are a young individual who has no family responsibilities, you may find this coverage to be enough. However, anyone nearing 30 should opt for a higher sum insured, especially when they also have their loved ones included in the plan.
3. The policy may or may not cover your family: Health insurance offered by your employer may limit the number of members that can be covered under the plan. If your company offers coverage only to you, you would surely need a family floater policy that would provide you with the much-needed insurance coverage.
4. A lot is written in the fine print: All health insurance plans come with certain limits and exclusions, and reading the fine print becomes very important. Corporate mediclaim policies often have clauses such as deductibles and copayments where every time a claim is raised, the policyholder employee has to pay a given percentage from his/her pocket.

Making the Most of Your Corporate Health Insurance

Treating the corporate health insurance plan as an extra cover can be more useful in the long run. You can try any or all of the following options, depending on your insurance needs:

• Buy a separate health cover for yourself and your family.
• Opt for a top-up or a super top-up plan over and above corporate health insurance.
• Opt for add-ons that you think would suit your medical needs to enhance the coverage.

With a personal health insurance plan, you get these benefits, which might not be available in your corporate health plan:

• If the employer pays the entire premium, you lose out on the 80D tax benefit for the premium payment of your health insurance plan. Thus, your effective premium is reduced by 30% (assuming you are in the highest tax bracket).
• Your personal health insurance plan can be continued forever, i.e. help you in your post-retirement life as well, as long as you continue to renew it forever on time.
• You get to choose your coverage features, such as room rent limits, OPD benefits, PED (pre-existing disease) coverage, etc., based on your needs, which is not in your hands in a corporate health plan.
• You can port your existing personal health insurance plan to another insurer as per your requirement.

Conclusion

Your company may be offering you an excellent or very ordinary health insurance plan. In both situations, remember that:

• While corporate insurance is a great incentive, with today’s high medical inflation, it might not be enough.
• In the best-case scenario, buy a separate health insurance plan for yourself and your family and treat the corporate coverage as a secondary cover.
• You can also opt for a top-up or a super top-up plan to increase the sum insured by your corporate health insurance plan.
• The coverage may cease to exist/alter in case you leave the job/the company changes its policies.
• Your coverage needs will increase as you grow older and as your family size increases.
• Analyse the corporate cover by reading the policy documents and then make a well-informed decision.