A good portion of corporate companies operating in India offer Corporate or Group Health Insurance as a benefit along with salary. There is nothing wrong with going for these plans. What IS wrong, though, is relying solely on these plans for your Health Insurance needs.
This short article delves into the reasons why a separate Health Insurance for yourself as well as your family is crucial, owned and paid for by you and no one else. Let’s quickly see why:
The total cover offered is often insufficient
With the constant rise in hospitalization costs, not to mention the heavy financial burden if a family member contracts COVID-19, it has become a necessity to have health coverage of minimum Rs 5 to 6 lakhs for an average male of 30 years earning 10 lakhs per annum who wants to insure his family. In most cases, though, the total coverage offered in corporate health insurance is not more than Rs 2 to 3 lakhs, and you may end up with a health cover that is insufficient to fulfill your needs.
Your employment status is a factor for coverage
One of the major drawbacks of corporate health insurance plans is that it will cover only if you are an employee of the company. The moment you leave the job, your health insurance plan will also leave you. If you do not have an independent cover during the period of unemployment, you and your family is at risk of being uninsured. Moreover, you will not be sure whether the new company will provide you with health cover or not. Also note that buying a health plan later in life is much costlier.
Problems in getting post-retirement coverage at low cost
Individuals who are covered under a corporate health insurance plan will cease to be covered after retirement. In this case, the absence of an independent health plan will force you to get insured at very high costs. Not only that, you will be subjected to a series of medical tests to check your eligibility to be insured in the first place. Also, don’t forget that most senior citizen policies don’t offer coverage for pre-existing diseases after a certain age.
Tax benefits cannot be availed on corporate health insurance
On buying an independent health plan, you can avail tax benefits up to Rs 20,280 under Section 80(D). Moreover, the maximum investment declaration of Rs 65,000 can be made under this Section, because the Section allows taxpayers to claim deductions for health insurance premiums paid for insuring self, spouse, dependent children, and parents. These tax benefits cannot be availed on corporate health insurance.
Corporate health insurance offers restricted customization options
Generally, when you buy an independent health plan, you have the flexibility to customize your plan as per your needs. As per your needs, you can choose Critical Illness clauses, insertions, features, and riders. But this is not the case with corporate health plans. The features you might be looking for will not be there because, in most cases, the employer negotiates the plan with the insurer and chooses the most cost-effective plan.
Who is ultimately benefitting??
Employers and companies generally look out for cost minimization by providing minimum coverage health insurance policies to their employees. Additionally, these plans come with co-payment and room rent limit clauses to keep your employer under low accountability. This is one of the major reasons why corporate health plans are not the solution to your real-world needs. We don’t have to mention separately how medical costs have almost touched the sky in India, with no signs of slowing down.
Looking at the limitations of corporate health insurance plans, it is important for you to have an independent health plan that financially supports you and your family at the time of health emergencies.
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