Why is it critical to get private health insurance?
Just because your employer has given you some health insurance coverage, it does not mean that you and your family are adequately covered. In the unfortunate event of hospitalization, don't be surprised that your work health insurance policy covers very little, or anything at all. Here is why you must have an independent health insurance policy for yourself and your loved ones.
In simple terms, a health insurance policy will usually cover only hospitalization expenses.
Scenarios where employer health insurance might be inadequate
Change in Employment Status
Termination of employment: In today's economic environment, job layoffs with just one day's notice are a reality. In such a scenario, the employee and his or her family will be immediately left without health coverage. What if a medical emergency requiring hospitalization occurs before this person was to find a new job?
Break in employment: If someone were to voluntarily leave a job, again, like above situation, there will be a gap and the family will then be exposed to the risk of paying the entire costs of a medical emergency from their own pocket.
No employee health benefits at new employer: What if your new employer does not offer any group health benefits to its employees. The employee might have taken the availability of an employer health plan for granted, only to be surprised that this is not the case when the medical emergency arises.
Inadequate coverage for family: Employer plans may or may not cover your entire family, i.e., spouse, kids and your parents. This might be most troublesome because often the employer health plan might not cover your aging parents, for whom health coverage is most important.
Quantum of coverage: Your employer plan might be barebones, and might just cover just the minimal basics, but nothing that might be relevant to you, given you and your family's medical history. Corporate plans, by definition, are a one size fits all type of plan. Even if it does cover the say a family of four members, the rupee amount of coverage might be very low.
Top up on your employer plan: Some private plans might allow you to purchase a top up plan that kicks in over and above the coverage that your employer provides. However, if you change employment, you will still be liable for the coverage up to that threshold amount before your private plan starts your coverage. For e.g., your employer plan covers up to Rs 2 lakhs of hospitalization expenses, and you buy a top up of an additional Rs 1 lakh, which kicks in only after the first Rs 2 lakhs has been consumed. If you leave your job, your private plan will still only cover you after you have paid the initial Rs 2 lakhs. Top
What are the benefits of taking a private health insurance plan?
Build your medical history: A health insurance policy has certain exclusions that do not allow the insured to claim certain benefits for the first few years of health coverage. Therefore, having a policy from an early age means that this time period can be covered much sooner in one's life when one is less vulnerable to medical problems. After this period of exclusions is over, the health policy is of great value because it will cover a much wider range of diseases and treatments.
Avoid exclusions and delays: If the new employer does not have a health insurance plan and you decide to opt for one at that point in time, you might have to wait for a few years to avail of all the benefits.
Avoid difficulty of getting insurance in old age: The older you get, the higher the statistical chance that might suffer from medical issues. As a result, no insurance company will consider the insurance application of older people favourably. There is a lesser chance of you being covered. Many medical policies are not allowed once you have conditions like diabetes, hypertension etc. Or, if you do get covered, the annual premium might be more expensive. Insurance companies do not look at pre-existing diseases favourably, but if you have had a private policy with this insurer, then you have a history with them.
Security and peace of mind: An employee and his or her family will remain covered irrespective of the employee's job status. This gives one peace of mind, especially when the job situation might be in transition. Top