Rajesh Verma is 45. His family of four includes— his father, wife and daughter. One fine morning, his friends were discussing the rising medical costs and the importance of having an individual health insurance policy. But Rajesh was not interested in buying any separate health cover as he was confident his corporate health cover will help him in case of any medical emergency.
His trust on a group health insurance makes me think, “Is a medical cover of Rs 2 lakhs provided by his employer sufficient?”
Undeniably, the answer is No. Rajesh is clearly underinsured. As he grows older, increasing medical expenses and longevity will necessitate a reconsideration of his family’s growing healthcare needs. He must take steps to prevent the situation that can compel him to meet sudden out of pocket expenses during a medical emergency and the required stress that comes along with every health issue.
Though, it is true that most of the employers are offering health insurance to their employees, this cover may fall short in the following cases:
- In case of a job change: When you leave your current employer,your corporate health cover also comes to anend.The new employer may not offer a health cover or provide a lower coverage.
- In case you decide to start your own business: It is possible that you may not join a new job and instead think about starting your own business or venture. In that case, your previous group health cover will cease to exist.
- Changes by the company in the current health insurance plan: Sometimes, for the sake of saving some money, companies start resorting to cost cutting. In such a scenario, your company might make some changes in your existing plan by lowering the sum insured or downgrading some other features. This might get you exposed to risk of under-insurance.
- In case you are nearing retirement: Most of the companies withdraw their coverage after retirement. So, getting a fresh insurance cover after retirement can be quite challenging. Even though the maximum entry age for getting a health insurance has been increased to 65 years, you might end up paying higher premiums, or get very limited coverage.
- You can’t customise the health cover: Employers negotiate with health insurance companies on all the aspects, including the number of diseases covered, inclusion of dependents, etc. It means employees don’t have any authority to customise the policy as per their needs.
Now you might have clearly understood why relying on a corporate health insurance is not a good move, I will suggest some insurance policies that should be bought to beat the medical inflation rate-
Individual health insurance plan: As we have already listed above the shortcomings of a group health cover, it is necessary to buy an individual health policy that stays with you even if you change/leave your job, start a new business or get retired. Moreover, when we customise everything from car, home to even our vacation, why should we spare our health insurance policy? If you have an individual policy, you can customise it as per your requirements.
Further, you can go for a family floater health insurance policy to cover your entire family under one plan. However, the premium depends on the age of the eldest member in the floater, and therefore, if you have senior citizen parents, it is advised to go for an individual or senior citizen health insurance policies for them.
In addition to the coverage, your health insurance policies can give tax benefits as well. As nothing comes free in this world, don’t forget to renew your policy on time to enjoy all the benefits of mediclaim policies.
Super Top-up Health Plan: This policy offers you an additional coverage over and above your existing individual mediclaim policy or corporate health insurance plan. It reimburses the medical expenses if they cross the threshold or deductible limit. For instance, if you have a super top-up mediclaim policy of Rs 10 lakhs with a deductible limit of Rs 5 lakhs, the insurer will cover all the expenses overRs 5 lakhs.
These plans come with a deductible amount. So, keeping the deductible amount close to the sum insured of the existing plan will provide you the maximum benefits. Also, such plans do not cost you much due to deductible limit.
Before I suggest the other insurance policy that you should buy, let me clarify one thing—super top-up is different from top-up plans! No, it is not only the first word, but the entire functioning of a super top-up policy is different from top-up plans. While, a super top-up considers the total claims in a year to ascertain the deductible limit, a top-up policy takes individual claims in the account for the deductible purpose. For instance, you have top-up and super top-up policies of Rs 10 lakhs with a deductible of Rs 5 lakhs each. If there are two medical bills of Rs 4 lakhs each in the same policy year, top-up policy will not cover any of the bills as the deductible limit is not crossed. However, super top-up policy will offer coverage as the combined medical bills,i.e., Rs 8 lakhs (4+4) is more than the deductible limit, which is Rs 5 lakhs.
Critical Illness Health Insurance Plan: This plan works differently than the conventional health insurance plan. It pays out a lumpsum amount,i.e. sum assured in case you are diagnosed with any listed critical illness like heart attacks, cancer, etc. In addition to medical expenses, there are other expenses, including household expenses, loan EMIs, etc.; for which you also need money. What if a breadwinner is diagnosed with a critical ailment and needs to be hospitalised? These plans pay you a fixed amount, irrespective of the medical expenses incurred, which you can use for any purpose. So, buying this plan over and above the traditional health insurance plan gives you an added security in case you contract any life-threatening health problem.
Given the soaring medical costs, it is indispensable to have a secondary health insurance plan. However, consider the coverage of your existing plan, your current financial as well as health situation before going ahead with the decision of buying a secondary health insurance plan.