One of the few reasons for employed professionals not taking individual health insurance is the health insurances provided by their employers.
While such covers are definitely useful, one could be in for a rude shock if he realizes during a medical emergency that the health cover provided under his Employer’s Health Insurance is not enough.
It is important to understand the pros and cons of the health insurance plans offered by employers. An employer-provided health insurance is usually a master policy which covers all the employees in the organization.
It must be noted that the health insurance plans provided by the employers, also known as the Group Insurance plans, come with certain conditions that may be unfavorable and often they offer limited coverage due to sub-limits under numerous heads.
A person depending only on his employer’s Health Insurance should know that he may not be fully covered.
An important, but most often ignored limitation of the Employer’s Health Insurance is that it is valid only for the period for which one is employed with a particular organization.
People often forget that they (and by extension, their families) are not covered during the intervening period when they are between jobs.
There have been instances of medical emergencies having hit on employees / their family members while they were between the jobs.
There is also a possibility that the new company may not be offering health insurance to its employees.
There are other limitations of the Employer’s Health Insurance plans. The Employer’s Health Insurance cover becomes invalid if the organization fails to pay the premium or if the insurer pulls out of the contract.
Also, many companies are now excluding elderly parents from the health policy provided to their employees.
An employee has little choice in such situations. There may be various expenses which may not be covered under these policies.
Pre- and post-illness costs like diagnostic tests, doctor’s fees, nursing care, ambulance charges, etc. may not be included under Employer-provided health insurance policies, but may amount to a substantial sum.
An Employer’s Health Insurance is linked with the employer and hence dependent on the individual’s association with his employer.
However, the need for Health Insurance is felt more when one crosses 50 and moves towards the retirement.
Also, lifetime renewal and no co-pay in the later years are some of the most sought-after features these days.
But after enjoying medical cover from the employer till retirement, it may get difficult for one to get new Health Insurance from outside post-retirement (60-65 years). Post-retirement, even if one manages to get a health insurance from outside, the premium on the new policy could be very high.
There is no denying that the Employer’s Health Insurance has some great benefits. Premiums on these policies are low in relation to the sum assured when compared with policies taken individually.
The Employer’s Health policies are also easily available without major restrictions. The best part is that even the pre-existing medical conditions are covered in these policies.
An employee is not denied Health Insurance policy because of higher age or any past medical history.
An Employer’s Health Insurance plan may look attractive compared to individual Health Insurance plans, but it is not a complete solution.
Given the limitations of such plans, it is advisable that apart from the Employer’s Health Insurance policy, one should go for a separate health insurance policy (individual or floater) for self and the family.
For someone with an Employer’s Health Insurance policy, it makes sense to buy an indemnity-based regular health insurance, a fixed benefit policy or a top-up plan.
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