Should you buy health insurance if your employer has you covered under a group medical plan?

Health insurance is very important in the world we live in today. With the rising cost of healthcare, an unexpected illness or injury can quickly become a financial burden. If you are working, there is a good chance you are covered by your company’s group health insurance plan. So do you need to supplement it with a personal health insurance policy? In this blog, I will explain why it might be a good idea.

What is a group health insurance plan?

A group health insurance plan is a benefit your company provides to you and your family. It helps you pay for any medical expenses you may incur during your employment with the company. In many cases, the company will pay the premiums for the plan, and you will be responsible for any co-pays or deductibles. Some plans may also cover dental care.

However, there are several limitations of group health insurance.

Corporate health insurance plans provide limited coverage

Group health insurance plans have limited coverage periods. This means that employees enjoy the benefits of the plan only as long as they are part of the organisation. In the event of switching to a different organisation, the plan is terminated. So, when you are between jobs, you are essentially without a health insurance policy during that period. You have no safeguards to protect you if something untoward occurs during this time.

Corporate health insurance plans provide a low amount of sum assured

As per a recent study, nearly 76% of employer-provided insurance schemes have room-rent and co-pay limiting clauses. Co-pay clauses stipulate that the insurer will only cover a portion of the costs incurred, and the insured party will be responsible for paying the remaining balance out of their pocket. Clauses limiting the room rent amount essentially signify that your hospital room rent will only be covered up to a particular level, typically as low as half of the total rent.

Let’s say that your sum Insured is 3 lakhs, but you get sick and need to be hospitalised, and the total cost of your stay is 5 lakhs. If you do not have an additional individual health insurance policy, you will be responsible for paying the extra 2 lakh out-of-pocket after your insurance claim has been paid.

Because of this, the real advantage of having an insurance cover is effectively reduced, as the weight of financial responsibility is only alleviated rather than eradicated.

A significant proportion of corporate group health insurance plans offer low sums assured. In fact, the average sum assured was found to be around Rs 2-4 lakh. There is a chance that these plans will not provide you with the level of protection that you require if you actually need it.

Additionally, your family is the most significant factor to consider. Even though some employer-provided health insurance plans include coverage for your dependents as part of the plan, the coverage typically varies from 2 lacs to 5 lakhs is not sufficient.

Supplement your corporate health plan with a personal health insurance policy

The solution is straightforward. Purchase a personal health insurance plan with the appropriate coverage. This way, even if your employer’s health insurance plan to fall back on. You might also consider purchasing a personal top-up plan. This way, you can take care of insurance claims over and above your corporate plan.

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