Corporate health insurance: Why employees need a personal health policy

New Delhi: Increasing health issues and rapidly rising medical costs have made it difficult for many people to afford the hospital bills and get proper treatment. At times when money is much needed many people fall short have to rely on borrowing. Sometimes, people delay getting a health insurance policy due to corporate health insurance provided by their establishment.

Companies usually provide health cover free of cost, and many group policies waive waiting periods and cover pre-existing conditions from day one. While these insurance policies might be excellent benefits, they are designed as a bonus for your employment. Therefore, an employee must not think of them as a reliable source of coverage in times of medical emergencies.

It is important to understand that the company-provided health coverage lasts only as long as the employment. Once you lose the job, the safety net is gone. Sometimes, people have to leave their jobs due to health-related problems which come along with hefty medical bills. However, losing a job means losing corporate health insurance. A person under such circumstances is pressured by double burden of health issue and no source of money.

Also, with constantly increasing medical costs and expensive treatments, it is better to have insurance with comprehensive and complete coverage, which corporate insurance usually fails to deliver.

-- The major limitation of such coverage is that it is tied to your job and is merely an employment benefit, which does not provide lifelong coverage. Once the job is gone, the safety net vanishes.

-- Rising medical expenses demand substantial coverage for emergency needs, which may arise out of the blue. Many company-based policies cover only a limited sum insured, whereas an ICU stay in a metro city may cost Rs 25,000 to Rs 50,000 a day, and cardiac surgeries may go as high as Rs 10 lakh.

-- A person often aims for health insurance with family cover, which gives a cushion to the individual as well as family members. Corporate health insurance may not cover parents, with possible limitations on spouse- or children-related expenses. Thus, it is better to look out for a family health insurance policy.

-- The employee usually has no say whatsoever in the health insurance policies available to them. These policies are predefined and tied to the plan by the establishment. The person is not free to choose the insurer or the network of hospitals.

Buying personal health insurance is important at a young age since it may have waiting periods of up to 3 years for pre-existing conditions before it kicks in. Once that young age passes and health issues start kicking in, the agonising waiting period may already be over. Corporate health insurance is not useless but insufficient on its own. It might help to layer it with personal health insurance, where it may cover minor health issues or be a safety net during the waiting period of the personal cover.

Employees who wait until they lose their corporate cover to buy a personal policy may find that they have lost years of waiting periods and also face higher premiums.